China’s central bank says it is steadfastly and wisely pushing for the internationalization of the yuan

China’s central bank says it is steadfastly and wisely pushing for the internationalization of the yuan

SHANGHAI (Reuters) – China’s central bank said it will resolutely and wisely push the internationalization of the yuan to promote a higher level of two-way openness of its financial markets.

The People’s Bank of China (PBOC) also said it would also promote efficient trading of the onshore and onshore markets, and reiterated that it would “resolutely fend off systemic risks,” said a report on the internationalization of the yuan published Friday.

The report comes at a time when the currency is facing renewed downward pressure, weighed down by a booming dollar, hawkish Fed tightening and a slowing economy. [CNY/]

China, along with Japan, is among the major outliers in a global series of interest rate increases to tame high inflation, with Beijing focused on reviving an economy battered by the COVID-19 shocks.

But such an expansionary policy divergence weighed on the yuan, prompting foreign investors to cut their holdings of Chinese bonds for the seventh straight month in August.

The People’s Bank of China said in the report that it would make it easier for foreign investors, especially global central banks and similar institutions, to increase their holdings of Chinese assets.

The central bank said that China will “improve the liquidity of yuan-denominated financial assets, facilitate foreign investors’ access to Chinese markets for investment, and enrich the variety of assets available for investment.”

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