China took another step to expand foreign access to its US$6 trillion bond market as part of broader efforts for the internationalization of the renminbi.
The People’s Bank of China (PBoC) announced Tuesday that it has scrapped the quotas that limited investments from foreign central banks, sovereign-wealth funds and other big financial institutions in the Chinese bond market, the Wall Street Journal reported.
Effective immediately, the foreign institutions will merely have to register with the central bank before they invest in the debt market, and will no longer need to apply to receive quotas.
“The relevant institutions can decide on their own how much to invest,” the PBoC was quoted as saying in a statement.
The central bank outlined the kinds of debt securities those institutions can invest in, including futures and other derivatives as well as bonds traded in the interbank market.
The move comes as China aims to make the International Monetary Fund declare the renminbi an official reserve currency later this year on par with major global units such as the US dollar, the Japanese yen, the euro and the British pound, the report noted.
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