Tag Archives: PBOC

GBA part of new forex easing plan

The Greater Bay Area will be included in an official plan to further open China’s foreign-exchange controls, according to the the PBOC. Speaking at the 13th Lujiazui Forum in Shanghai, which started yesterday, Pan Gongsheng, the central bank’s deputy head, said both the QFLP and QDLP programs will be expanded in Shanghai, Hainan, and the GBA. 

The QFLP scheme allows foreign institutional investors to convert overseas capital into Chinese yuan-denominated funds that can be used to invest in the domestic private equity and venture capital markets. 

The QDLP program allows domestic fund managers to raise funds from qualified domestic institutional investors and set up trial funds for investment in overseas primary and secondary capital markets. 

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PBOC will sell more bonds in HK

With a president whose finger is never far from the Tweet button, it’s best to be prepared. The People’s Bank of China said today it will sell RMB30 billion (US$4.3 billion) of short-term yuan-denominated securities in Hong Kong next week, signaling its plan to absorb offshore liquidity and cushion against further depreciation of its currency versus the US dollar, which shocked markets yesterday by breaking through the 7-to-1 level and resulting in the US labeling China a currency manipulator.

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More RMB bills on way for HK

The People’s Bank of China has announced it will issue RMB bills in Hong Kong in “late June”. This is being done ostensibly to “improve the yield curve” of the bonds traded in Hong Kong, yet it would appear that the announcement is timed to send a warning to speculators in the offshore market by soaking up liquidity and burning short-sellers betting on a decline amid the US-China trade war.

Since November last year, the PBOC has successfully issued RMB bills three times in Hong Kong through the Central Moneymarkets Unit (CMU) platform of the Hong Kong Monetary Authority. The latest issuance was on May 15th, including three-month bills and one-year bills of RMB10 billion each.Read more in Chinese.