The People’s Bank of China (PBOC) has auctioned 20 billion yuan ( approx. USD$3 billion) in central bank bills via Hong Kong, in move which analysts expect to bolster the region’s status as an offshore renminbi trading hub.
On 13 February PBOC announced that the successful issue of 10 billion yuan in three month bills and 10 billion yuan in one year bills via auction in Hong Kong, at coupon rates of 2.45% and 2.8% respectively.
In an official statement the Chinese central bank said the move is intended to broaden the range of high-quality renminbi-denominated financial products in Hong Kong, as well as improve the regional renminbi yield.curve.
The move comes just after PBOC sold its first renminbi-denominated bills in Hong Kong via the region’s Central Moneymarkets Unit in November last year to raise 20 billion yuan.
Analysts point out that the latest auction was six times oversubscribed, as compared to 3.8 times for the first round, pointing to rising demand for the instruments, while the coupon rates for both bills were also reduced.