China gives nod to 5 foreign banks for bond market

PBOC allowed foreign institutions to trade in its interbank bond market to widen the channels for offshore Renminbi to flow back into China.

China has given approval for five more foreign banks to participate in its interbank bond market as part of a program to promote the use of the yuan in settling cross-border trades.

In a notice dated Aug. 16 but posted online Monday, the People's Bank of China said the five banks are: Macau and Malaysian subsidiaries of Industrial & Commercial Bank of China Ltd., the Macau subsidiary of Bank of Communications Co., Singapore-based OCBC Bank, and Fubon Bank (Hong Kong) Ltd.

The PBOC in August last year launched a pilot program to allow foreign institutions to trade in its interbank bond market in a bid to broaden the channels for offshore yuan to flow back into China, according to a report in Fox Business.

The trial program currently includes banks from Hong Kong, Macau and other countries and central banks from abroad. China's interbank bond market includes over 10 types of bonds, such as government bonds and policy-bank bonds.