|China C.bank Approves Offshore Yuan Investment Programme|
China's central bank has approved a pilot programme allowing some domestic institutional investors to buy offshore yuan products, as Beijing pushes ahead in internationalizing its currency.
The People's Bank of China (PBOC) has recently approved the so-called Renminbi Qualified Domestic Institutional Investor (RQDII) programme, without saying which institutions would be qualified to participate.
To elevate the yuan's status as a global currency, Beijing has established offshore yuan centres from Sydney to London, signed swap lines with countries in the Middle East and allowed foreign companies in China to move yuan funds across borders with greater freedom than ever before.
A PBOC official said that the central bank was studying the RQDII programme to allow domestic investors to invest overseas using the Chinese currency.
"The RQDII scheme will promote the outflows of the yuan into foreign markets, quicken the pace for foreign markets to launch yuan financial products and attract more international investors to participate in their trading."
Mainland institutions had long been approved to invest in foreign exchange products in overseas markets through the current Qualified Domestic Institutional Investor (QDII) scheme under a quota system.
The central bank is also studying a Qualified Domestic Resident (QDR) programme, which will allow Chinese individuals to directly invest in yuan products outside the mainland.
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Published on our website on Nov.18, 2014