MNI BRIEF: PBOC To Strengthen Offshore Yuan Markets

The People’s Bank of China will further support the growth of offshore yuan markets and improve cross-border financial infrastructure while making efforts to promote the currency's internationalisation, said Tao Ling, deputy-governor at the central bank, in an interview with Financial News on Thursday.

The Bank will improve the liquidity supply system of offshore markets, perfect the long-term mechanism for the issuance of offshore sovereign bonds, enrich offshore yuan financial products and expand the “connect program” between the mainland and Hong Kong, she said, noting the PBOC will encourage overseas central banks and international companies to issue panda bonds and support Shanghai to accelerate its construction as an international financial hub. (See MNI INTERVIEW 2: China Needs Strong Yuan To Support Imports)

The Bank will strengthen the Cross-Border Interbank Payment System (CIPS), expanding its service scope and improving the security, and efficiency of yuan clearing and settlement. It will also optimise the layout of yuan clearing banks and effectively utilise currency swap mechanisms, Tao added.

In addition, the central bank will enhance incentives for financial institutions to use relending tools targeting technology innovation and transformation, supporting large-scale equipment upgrades in key areas and initial lending to small and medium-sized technology enterprises, Tao noted.