China central bank approves offshore yuan investment programme: state newspaper

[SHANGHAI] China's central bank has approved a pilot programme allowing some domestic institutional investors to buy offshore yuan products, the official Shanghai Securities News said, as Beijing pushes ahead in internationalizing its currency.

The People's Bank of China (PBOC) has recently approved the so-called Renminbi Qualified Domestic Institutional Investor (RQDII) programme, the newspaper reported on Tuesday, without saying which institutions would be qualified to participate.

To elevate the yuan's status as a global currency, Beijing has established offshore yuan centres from Sydney to London, signed swap lines with countries in the Middle East and allowed foreign companies in China to move yuan funds across borders with greater freedom than ever before.

A PBOC official told Reuters last month that the central bank was studying the RQDII programme to allow domestic investors to invest overseas using the Chinese currency. "The RQDII scheme will promote the outflows of the yuan into foreign markets, quicken the pace for foreign markets to launch yuan financial products and attract more international investors to participate in their trading," the newspaper quoted an unnamed PBOC official as saying.

Mainland institutions had long been approved to invest in foreign exchange products in overseas markets through the current Qualified Domestic Institutional Investor (QDII) scheme under a quota system.

The RQDII programme will not be restricted by quotas, the newspapers said.

PBOC officials were not immediately available for comment.

The central bank is also studying a Qualified Domestic Resident (QDR) programme, which will allow Chinese individuals to directly invest in yuan products outside the mainland, the newspaper said.

REUTERS