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Regulators Should Introduce Derivatives To Attract Yuan Bond Investors

MNI (Singapore)

Regulators need to accelerate the introduction of financial derivatives to offer more risk hedging tools and improve policy transparency to dispel concerns about China’s opening up, and in order to attract foreign investors to increase their holdings of yuan bonds, 21st Century Business Herald reported. Overseas investors have increased holdings of yuan bonds since September as China-U.S. interest spreads have narrowed and worries about recession in Europe and the U.S. have increased. Regulators clarified capital management requirements for foreign institutional investors investing in China's bond market in mid-November, boosting market confidence as investors feel yuan bond trading rules are further aligned with international practices, the newspaper said citing industry insiders.

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