PBOC pushes foreign yuan market

Business | Avery Chen and agencies 25 Aug 2020

Zhou Chengjun, head of the People's Bank of China's finance research institute, suggested building a global foreign exchange market for the renminbi that will allow offshore investors to buy mainland asset management products and other yuan-denominated assets.

Zhou said in a forum yesterday that the international foreign exchange market for the renminbi could promote the growth of onshore and offshore yuan financial services and allow foreign investors to hold and invest in yuan-denominated assets without opening accounts in mainland China.

There is increased demand for yuan-denominated assets and China is encouraging companies to settle international trade in the yuan, with the offshore market holding more yuan, Zhou said.

Meanwhile, the central bank yesterday injected 100 billion yuan (112.12 billion) into the market through seven-day reverse repos at an interest rate of 2.2 percent, and 60 billion yuan through 14-day reverse repos at an interest rate of 2.35 percent.

Separately, China's fiscal revenues amounted to 947.2 billion yuan, compared with an expenditure of 1424 billion yuan in July, according to the Ministry of Finance.

China's fiscal revenues 8.7 percent in the January-July period from a year earlier, compared to a 10.8 percent fall in the first half of the year.

Fiscal expenditure for the same period dropped 3.2 percent on-year, the ministry said.

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