China's central bank opens bond market to Hong Kong lenders

Promotes development of renminbi trade settlement in Hong Kong and enhance its Renminbi offshore business.

The People's Bank of China will launch a pilot scheme for the Renminbi Clearing Bank and other eligible institutions outside the Mainland to make use of their renminbi funds to invest in the Mainland's interbank bond market.

The Clearing Bank and participating banks of renminbi business in Hong Kong can conduct trading in the Mainland's interbank bond market upon approval by the People's Bank of China, according to a government report.

The Hong Kong Monetary Authority will liaise with the People's Bank of China on the implementation of the scheme, and will issue a circular to authorised institutions. The authority's Chief Executive Norman Chan said the launch of the scheme has opened up a channel for renminbi funds and financial institutions in Hong Kong to invest in the Mainland.

"This will further promote the development of renminbi trade settlement in Hong Kong, and enhance the attractiveness of RMB offshore business in Hong Kong."

Under the scheme central banks and monetary authorities outside the Mainland can also invest in the Mainland's interbank bond market.