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April 18, 2014

China to relax rules for foreign central banks in interbank market: sources

“(Reuters) – The People’s Bank of China (PBOC) is planning to ease restrictions now in place on foreign central banks and financial institutions trading in China’s interbank bond market, sources with direct knowledge of the situation told Reuters.”

“The move, if implemented, would mark another incremental opening of China’s capitalmarkets, following an announcement on April 10 that Beijing would allow cross-border investment between the Hong Kong and mainland stock exchanges.”

“The sources cited a recent meeting between the central bank and senior banking executives in Beijing, but did not give further details on how the rules would be relaxed or any contemplated timeline for implementation.”

“Foreign central banks and financial institutions are already allowed to participate in the interbank market through the Qualified Foreign Institutional Investor (QFII) program, which controls foreign access to Chinese financial assets — including stocks and bonds — through a quota system.”

“Foreign central banks with currency swap agreements with the PBOC, as well as commercial banks approved to conduct offshore yuan clearing, can also apply for interbank bond market quota through separate channels.”

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Read full Reuters article here.

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