Business

World Bank issues bond denominated in Chinese yuan

yuan notes
Image caption Yuan denominated bonds issued in Hong Kong are a fast-growing capital market

The World Bank has issued its first bond denominated in the Chinese currency, joining a small but fast-growing market.

The yuan-denominated bond is being issued to promote the use of the Chinese currency in international markets.

It will raise 500m yuan ($76m; £49m).

Other bodies, including the Asian Development Bank, and firms such as McDonald's and Caterpillar have issued yuan bonds.

China's stake in the World Bank, which gives financial and technical assistance to developing countries, is set to increase.

It could eventually see China as the third-largest stakeholder in the lender after the US and Japan.

Doris Herrera-Pol, the global head of capital markets at the World Bank, said: "This is a landmark transaction for the World Bank as it is the first World Bank issuance in RMB (yuan), and signals the strong interest of the World Bank in supporting the development of the RMB market."

The market in Hong Kong for yuan-denominated bonds started just over three years ago.

In September last year, the Chinese government itself started issuing bonds in its currency, also known as the renminbi, there.

Hong Kong, although part of China, has a well-developed and more open financial market and is a conduit between China and the capitalist developed world.

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