China's Yuan Edges Up on Firmer Midpoint, Dollar Selling

BOC chairman Tian Guoli said: "We hope the index will serve as a guide for overseas institutional investors to invest in China Interbank Bond Market (CIBM), an important reference for global central banks and regulatory authorities to understand China's financial market, as well as a novel contribution to the financial market development and RMB internationalisation". "Yuan" is the Mandarin for a unit of the renminbi currency.

China should adopt a more balanced and flexible currency policy in response to two-way fluctuations of the renminbi, or yuan, in the future, a central bank economist said on Friday.

Perhaps most significant was the United Kingdom government's refusal to toe the U.S. line regarding the China-backed Asia Infrastructure Investment Bank (AIIB).

The main reason is USA interest rates, which have been at near zero since 2008, but are poised to increase for the first time in nearly a decade.

And for the two issues from Chinese state-owned banks, European participants were nearly negligible.

The two banks, as well as the Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank and Standard Chartered, are joint bookrunners and lead managers for the deal.

The index was launched globally, with ceremonies held in Singapore, Beijing, and London.

It's unnecessary to be anxious over China's economic growth in the first nine months of the year, as it was within expectations and adjustment directions, the official Xinhua News Agency wrote in a commentary on its website yesterday.

The report also said that South Korea's currency, the won, is undervalued, falling by 7.7 percent over the past year against the dollar.

Another issue London faces is that the expectation for steady yuan appreciation that was crucial in boosting Hong Kong's yuan bond market in the first few years no longer exists.

China intervened "heavily" in the foreign-exchange market in the last three months, spending an estimated total of US$229 billion (RM982.513 billion) to prevent the yuan from falling, according to the report. Doubtless influenced by the events of the summer, financial institutions in China put "less government intervention in onshore equity markets" at the top of their list of urgently required policy reforms, while for global respondents it is in second place, behind liberalisation of the legal services market and judicial reform.

China's booming domestic debt market is pushing investors to seek higher yields offshore, just as its banks start to expand yuan lending world-wide.

Britain and other G20 members are jostling for position as financial partners for China but when the SDR issue came up around the IMF's spring meetings, US Treasury Secretary Jack Lew said the yuan was not yet ready for inclusion.