SHANGHAI (Reuters) - China on Friday said that it will soon introduce a foreign currency lending business that will allow borrowers to use offshore foreign currency bonds as collateral for interbank loans, in a further step toward liberalising the country’s capital markets.
The China Foreign Exchange Trade System said on its website that it would introduce the use of such bonds for collateral on its foreign exchange trading platform on July 23.
It said the move was intended to “enrich foreign currency financing tools, and to further satisfy the asset and liability management needs of domestic and foreign currency-lending institutions.”
The new lending business will support transactions using the U.S. dollar, euro, Hong Kong dollar, Japanese yuan, Australian dollar and Canadian dollar, and can handle transactions in the same currency or between different currencies.
Reporting by Andrew Galbraith; Editing by Shri Navaratnam