UK Set to Launch First CNY Bond Outside of China

Britain stepped up its bid to become a leading trading partner with China on Friday with the launch of the world’s first offshore renminbi government bond.

“The government is taking these steps in recognition of the increasingly prominent role that renminbi is playing in the global economy and financial markets, including as a potential future reserve currency,” said Chancellor of the Exchequer George Osborne at the end of a China-U.K. investment summit held in London.

The deal is expected to launch within the next few weeks or months and proceeds will be used to finance the U.K. foreign currency reserves.

“The bond is intended to be a one-off issuance, with the benefit of contributing liquidity to the small but fast-growing renminbi offshore market and attracting other market players in both the private and official sectors,” said Osborne.

The summit was co-hosted by Osborne and Chinese Vice-Premier Ma Kai and resulted in over £2.4 billion ($3.9 billion) in commercial deals being struck between Britain and China.

It came as China works to internationalize its currency and the U.K. competes to be China’s main trading hub in Europe. The U.K. is already one of Europe’s largest investors in China, and among the largest destinations in Europe for China’s outward investment. It has set an ambitious target of doubling overall exports to £1 trillion by 2020 and hopes that China trade will be a large contributor.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza