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China will let overseas yuan clearing banks invest yuan in mainland bond markets, according to China's central bank.
The financial institutions allowed to invest in the mainland interbank bond market are yuan clearing banks in Hong Kong and Macau, foreign central banks, and overseas banks involved in yuan cross-border trade settlement programmes. And the money they are allow to invest should come from trade settlement or central bank swaps.
The People's Bank of China says the move is aimed at promoting China's programme to encourage the use of yuan in settling trade. And analysts say that is part of efforts of to internationalize the Chinese currency.
- Foreign banks to underwrite more bonds 2010-08-12