China’s central bank and finance ministry have discussed creating a better mechanism for issuing sovereign debt overseas, as Beijing eyes a greater global role for the yuan amid wavering confidence in the US dollar.
In a joint meeting attended by Liao Min, China’s vice-minister of finance, and Zou Lan, deputy governor of the People’s Bank of China, both sides said that coordinated fiscal and monetary policy measures were necessary to assure markets and help the economy navigate a “complex and volatile market environment”.
No more details about the bond issuance mechanism were provided in the meeting readout.
“China’s policy direction to promote the internationalisation of the yuan is quite clear,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, pointing to recent calls from Pan Gongsheng, China’s central bank governor, for a global payment system to reduce dependence on a single currency.
“I think the increased issuance of offshore yuan-denominated treasury bonds in the future is foreseeable,” Zhang added.
