The PBOC said on Wednesday that it will issue 15 billion yuan of 6-month yuan-denominated bills in Hong Kong on September 19, the central bank’s second offshore issuance within a month. The PBOC issued 10 billion yuan of 3-month yuan-denominated bills in Hong Kong on August 22.
The PBOC’s regular bill issuance in Hong Kong provides overseas investors with high-quality yuan-denominated investment products with sovereign credit ratings, helping improve the yield curve of yuan bonds in Hong Kong, said an article published by Financial News, a PBOC-backed publication.
More issuance of offshore bills sent a signal of the PBOC’s intention to absorb more offshore yuan liquidity, which would help stabilize the yuan’s exchange rate in the offshore market, it said.
Moving forward, the central bank may issue more yuan-denominated bills offshore, and the size of issuance may increase further, as the PBOC strives to strengthen the regulation of offshore yuan liquidity, it said.
As China’s policy aimed at stabilizing the economy and expectations gradually kick in, it will provide a solid foundation for the yuan to stay at a reasonable and balanced level, it said.
