BEIJING: China has allowed another 32 foreign institutions to trade in its onshore interbank bond market as the country speeds up the pace to widen access to its capital market.
Eleven Qualified Foreign Institutional Investors, 11 Renminbi Qualified Foreign Institutional Investors and 10 financial institutions including commercial banks and insurers have won access to China’s interbank bond market, according to statements released on the Shanghai Clearing House’s website today.
The number of new approvals compared with a total of 73 granted in the last year and brought the total number of foreign institutional investors in the market to 243, Shanghai Daily calculated based on the 2014 financial market report released by the People’s Bank of China.
China’s bond market is the third largest in the world at 36.7 trillion yuan (US$5.9 trillion) by the end of March, with the interbank market accounting for 95 percent of the total trading volume.
China first opened the interbank bond market to RQFIIs in 2012 and QFIIs in 2013. Foreign central banks with currency swap agreements with the PBOC and offshore yuan clearing banks are also allowed to invest in the market.
Local media reported last month that China may further ease restrictions for foreign participation in the interbank market by replacing the current approval system with a registration system.
As of the end of last year, foreign institutions held 572 billion yuan in China’s interbank bonds, accounting for 17.7 percent of the total, data from the central bank showed.
