At 0.49 percent, it was at the lower end of the World Bank’s guidance of 0.4-0.7 percent and below the three-year Chinese government bond yield at 2.434/2.387 percent.
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The World Bank has set an indicative yield range for its three-year Special Drawing Right (SDR) bonds for sale in China at yields well below those for similar Chinese bonds, highlighting Beijing´s challenge in getting global recognition for its yuan currency and SDR assets.
It is the first of a $2.8bn World Bank SDR-denominated bond programme approved by China earlier this month.
The issue, the first SDR bond in 35 years, is being watched by investors as it’s part of a wider push in China to raise the net supply of such bonds.
Says yuan less volatile than major currencies after Brexit shock * Yuan stability helped by G20 vow to avoid competitive devaluations * Says to keep liquidity ample, monetary policy to support reforms (Adds details, quotes) BEIJING, Sept 1 (Reuters) – China’s yuan remains relatively stable despite recent fluctuations, Yi Gang, a deputy governor of the People’s Bank of China (PBOC), said on Thursday.
China’s RMB Yuan, or renminbi, will be used as the settlement currency. That should warm the hearts of yuan internationalization promoters in Beijing who want the currency to supplant the US dollar someday.
“The main investors of SDR bonds are foreign central banks as they need to diversify their reserves”, said Penny Chen, a fund manager at Manulife Asset Management in Taiwan.
The World Bank’s bond issue should open the door for other institutions, for example the China-led Asian Infrastructure Investment Bank, to issue SDR bonds, and further increase the use of the yuan.
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Bank of Tokyo-Mitsubishi UFJ will be the sole Japanese bank underwriting the bonds.
