Tags: China | PBOC | Gold | Market

China's PBOC Unveils Steps to Develop Gold Market

Tuesday, 03 Aug 2010 07:10 AM

China will allow its banks to export and import more gold as part of a program to push forward the development of the country's market in the precious metal, the central bank said on Tuesday.

The People's Bank of China, in a statement on its website, also said that it would allow banks to hedge their positions in gold in overseas markets.

It added that it would urge banks to lend more to domestic gold firms looking to go abroad, while also actively developing more yuan-denominated gold derivatives.

In addition, Yuan-denominated equity linked products could be launched in Hong Kong by the end of this year as the city's role as an offshore yuan-settlement market continues to expand, a senior Hong Kong official said.

"We're expecting to see some kind of channel in which Hong Kong yuan deposits can be reinvested in China in investment vehicles," K.C. Chan, Hong Kong's Secretary for Financial Services and the Treasury, told Reuters, adding that it was "possible" such products would be offered this year.

"The idea is quite well researched and quite well accepted in China ... it shouldn't be very far away with some type of early experimentation," he added.

Chan said he expected China's Ministry of Finance to offer more yuan-denominated sovereign bonds in Hong Kong as early as this year after last September's maiden offering.

"We hope to see regular issues of sovereign bonds," said Chan, adding that such issues would help deepen the city's debt market while offering a useful benchmark rate for companies that want to issue debt in the former British colony.

Companies and banks that have issued yuan bonds in Hong Kong have previously taken their cue from official government bonds in the absence of an official yuan rate, and the regular issuance of sovereign paper will help for benchmarking purposes.

China last month eased rules on the sale of yuan-backed financial products in Hong Kong and gave banks and financial institutions greater access to yuan funds, as part of the country's longer term strategy to fully internationalize its currency.

The move helped solidify Hong Kong's role as a financial intermediary between China and the rest of the world, a position also coveted by rival Shanghai.

© 2017 Thomson/Reuters. All rights reserved.

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China will allow its banks to export and import more gold as part of a program to push forward the development of the country's market in the precious metal, the central bank said on Tuesday. The People's Bank of China, in a statement on its website, also said that it...
China,PBOC,Gold,Market
370
2010-10-03
 

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