by Chris Vermeulen
The People’s Bank of China (PBOC) has received approval from the World Bank allowing its issuance of bonds, which are denominated in Special Drawing Rights (SDRs). The World Bank is the first entity to approve of it, and consequently, marks the launch of the SDR bond market of the world’s second-largest economy.
Jim Yong Kim, The World Bank Group President, said “This is a landmark development for China’s bond market and for the SDR as an international reserve asset. We are very pleased to support China’s growing role in global financial markets. World Bank issuance of SDR bonds in China will support the G-20’s objective of expanding the use of SDRs and help promote the development of China’s domestic capital market. It will also increase Chinese investors’ access to foreign currencies in the domestic bond market, while opening up new opportunities for international investors seeking high-quality investment products in the country.”