Britain Announced Plans to Issue Yuan Dominated Bonds Outside of China
Britain recently announced its plans to become the first country outside of China to issue yuan dominated bonds as the country is aiming to be the Western hub for trading of the Chinese economy. The U.K. Treasury stated that its government is planning to issue the said bonds in the coming weeks, depending on market condition. No details on the amount of bonds will be released have been said.
This is the first non Chinese issuance of a RMB debt and is said to be used to finance Britain’s reserves, since Britain only held its reserves in U.S. and Canadian Dollars, Euros and Yen. And by adding the yuan signals it’s potential to be a future currency reserve. Politians are now scrambling to make London as China’s Western financial hub as the country is starting to loosen up their tight regulations in trading the yuan internationally.
As of last year the yuan passed the euro as the world second largest trade currency following the U.S. dollar and financial analysts are predicting its growth as the economy expands. To answer this authorities in Britain set off an offensive in hopes to attract Chinese capital in London as yuan volumes have doubled.