In Lon­don, first-ever off­shore sov­er­eign ren­minbi bond is­sued

China Daily (Canada) - - FRONT PAGE - By CECILY LIU in Lon­don cecily.liu@mail.chi­nadai­lyuk.com

China’s Min­istry of Fi­nance listed its first sov­er­eign off­shore ren­minbi bond on the Lon­don Stock Ex­change on Wed­nes­day, mark­ing a sig­nif­i­cant mile­stone in in­creas­ing Lon­don’s off­shore ren­minbi liq­uid­ity cur­rency and sig­nal­ing the ren­minbi’s po­ten­tial as a global re­serve cur­rency.

The 3 bil­lion ren­minbi ($458 mil­lion) three year bond is the first off­shore ren­minbi bond is­sued by the Min­istry of Fi­nance outside of China.

It is ex­pected to act as a bench­mark to aid the future pric­ing of ren­minbi as­sets and so en­cour­age the is­su­ing of more off­shore ren­minbi in­vest­ment prod­ucts. Bank of China and HSBC are joint global co­or­di­na­tors of the bond.

Shi Yaobin, vice-min­is­ter of fi­nance, said the Chi­nese and the UK gov­ern­ments have made joint ef­forts dur­ing the process of is­suance.

“The bond is­suance re­flects the prin­ci­ples of re­cip­ro­cal co­op­er­a­tion and mu­tual ben­e­fit.”

The Bank of England’s ac­cep­tance of the bond as an el­i­gi­ble col­lat­eral in­stru­ment in­creases its at­trac­tive­ness to in­vestors, as hold­ers of this bond can swap it with the BoE for ster­ling for short-term liq­uid­ity pur­poses.

Har­ri­ett Bald­win, the UK’s eco­nomic sec­re­tary to the trea­sury, said the bond’s is­suance is “a golden mo­ment” in the re­la­tion­ship be­tween the United King­dom and China, and the UK gov­ern­ment is com­mit­ted to fur­ther help­ing im­prove the ren­minbi’s in­ter­na­tion­al­iza­tion.

Gao Yingxin, ex­ec­u­tive vice-pres­i­dent of Bank of China, said or­ders for the bond have been re­ceived from a wide range of in­vestors.

CECILY LIU / CHINA DAILY

Bri­tish and Chi­nese of­fi­cials greet the launch of China’s sov­er­eign off­shore ren­minbi bond in Lon­don.

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