BEIJING – The World Bank has issued its first yuan-denominated bond in a move that will help China as it tries to increase the use of its currency in global markets.
The Washington-based lender said on Tuesday that it would raise 500 million yuan from the two-year bond issued on Hong Kong’s yuan-denominated bond market.
The move will “further deepen the market and permit investors to diversify their currency holdings and expand renminbi exposure”, the World Bank said in a statement, using the official name for the Chinese unit.
Last month, China said that its second yuan-denominated bond issue in Hong Kong had initially raised five billion yuan, with plans for another three billion yuan to be sold.
The move followed Beijing’s first yuan-denominated bond issue in Hong Kong in September last year, worth about six billion yuan.
It also comes following heavy equipment maker Caterpillar and fast-food giant McDonald’s each issued yuan-denominated bonds in Hong Kong, the first such sales by non-financial foreign firms in the city. The semi-autonomous Chinese territory is acting as a test bed for the internationalisation of China’s currency. Beijing is seeking to broaden the use of the yuan in the financial hub after approving its use to settle cross-border trade in 2009.
