RMB Bonds Will Go To The UK To Move Towards The International Reserve Currency.

The renminbi is heading for

Go in the right direction.

This is the important message uploaded from the sixth Sino British financial conference held in London in September 12th.

In this time

The British government has confirmed that it plans to issue Renminbi bonds in the coming weeks or months.

Once issued, it will be the first batch of RMB State bonds issued by non Chinese institutions, and it also indicates that the RMB will become the international reserve currency.

Or trigger demonstration effect

In September 12th, China and Britain held sixth Sino British financial dialogues in London. The British announcement after the dialogue said: "the British government confirms its plan to issue RMB bonds in the coming weeks or months, depending on market conditions.

The number of bonds issued will be determined at the time of issuance, but it is expected to reach the base of the market. "

This is the first foreign government that has explicitly stated that it will issue RMB bonds so far. It also indicates that the RMB is moving towards the direction of the international reserve currency.

Osborn, the British Chancellor of the exchequer, said Britain would try to add renminbi to its foreign exchange reserves, and the amount of treasury bonds could be obtained through specific channels.

At present, the reserve assets held by the United Kingdom are US dollar, euro, Japanese yen and Canadian dollar respectively.

The announcement indicates that the issuance of treasury bonds by the British government will provide financial support for the British reserve, and also indicates the British government's recognition of the potential of the renminbi as the future reserve currency.

It is reported that the countries that mainly include RMB assets in the national reserve assets are mainly in Asia and Africa, but the proportion is very low. Most foreign central banks hold RMB assets in the form of Chinese government bonds or quasi government bonds issued by the National Development Bank.

Some analysts told the first Financial Daily reporters that once the UK issue RMB bonds will have a clear demonstration effect, other countries' enthusiasm for RMB bonds will also be more obvious, especially in the case of the depreciation of the euro, European countries may act.

Jukka Pihlman, the global standard of the Central Bank of the Standard Chartered Bank and the global head of the sovereign wealth fund, wrote in a commentary on the Financial Times: "global central banks are fanatical about RMB assets.

Many countries have regarded Renminbi as a real reserve currency and are interested in the allocation of part of their reserves for holding renminbi assets.

At present, more than 50 central banks have been active in offshore or offshore markets.

Even the central banks in European countries are busy with the allocation of Renminbi reserves, not to mention Asian, African and South American countries that have developed rapidly developing trade and investment links with China.

Analysts pointed out that if the United Kingdom or other European countries issued RMB bonds to further strengthen the idea of London or other cities as the RMB offshore market in Europe, the issuance of RMB bonds by Asian African countries would be more likely to be the risk of dispersing reserve assets, increasing the liquidity of RMB assets, and Hedging exchange rate risks in cross-border trade payments.

As early as the end of 2013, Mallam Sanusi, governor of Nigeria central bank, said in an exclusive interview with "First Financial Daily": "we will consider issuing RMB dim sum bonds, providing us with stable RMB cash flow and improving the liquidity of RMB, which helps to hedge the risk of exchange rate fluctuations in the process of bilateral trade."

Moreover, Mallam Sanusi has made it clear that it hopes to increase the proportion of RMB assets in foreign exchange reserve assets to 5%.

With the issuance of the British government's RMB bonds, the countries that originally "consider" issuing Renminbi bonds will "consider" into action.

In its commentary, Pihlman said that the pursuit of RMB assets by overseas central banks is becoming a trend. Central banks in Europe, Asia, Africa and Latin America are all eager to make RMB assets.

On the other hand, the Chinese government is also providing institutional convenience for overseas central banks to hold renminbi assets.

In July, the Central Bank of China signed a memorandum of understanding on RMB clearing arrangements with the Central Bank of France and Luxemburg central bank. It will set up clearing houses in Paris and Luxemburg.

In the same month, the Central Bank of China also granted the Swiss bank's investment quota of 15 billion yuan in the bond market of the Bank of China (601988 shares).

Pihlman believes that France and Switzerland are likely to trigger the imitation of other central banks in Europe. This is not too bad, especially when European countries compete for the status of the renminbi offshore center in Europe.

In addition, from the institutional level, in April this year, the central bank decided to relax interbank bond market access and set up leverage ratio indicators.

Analysts believe that the relaxation of access to non legal entities means that the global central bank, sovereign funds and the world bank can all enter the interbank market directly.

In addition, the China Securities Regulatory Commission also said that we should study the issue of opening to the outside world in accordance with the negative list plus the national treatment before admission.

In the offshore market, China's Ministry of finance has ensured that overseas central banks can get quotas in renminbi bond auctions.