PBOC Pushes Yuan Borrowing Abroad to Internationalize Currency

China’s central bank vowed to further encourage financing in the yuan by overseas entities, betting cheap borrowing costs and increased demand for the currency offshore will be crucial drivers for its globalization.

The country will promote the role of the yuan as a funding currency as one of the key steps to advance its internationalization, the People’s Bank of China said in its annual report released Oct. 30. The central bank pledged to support the use of a variety of funding products, including yuan loans, panda bonds, offshore yuan bonds and trade financing, to help make it easier for overseas institutions and corporations to obtain the currency.