China will open up the final corner of its onshore bond market to foreign financial institutions as Beijing attempts to reignite global interest in renminbi debt in the face of a severe economic slowdown, reports the Financial Times. The People’s Bank of China announced on Friday evening in Beijing that overseas investors will be granted access to onshore exchange-based bond markets in Shanghai and Shenzhen starting from June 30.
The central bank said the opening up of the markets, announced alongside a batch of other long-awaited reforms for the country’s fixed-income markets, would “further facilitate investing by foreign institutional investors in the Chinese bond market and unify the cross-border management of funds”.
The move comes after global investors dumped a record $35 billion worth of renminbi-denominated bonds in the first four months of the year as Covid-19 lockdowns have pummeled the country’s currency, pushing the renminbi down by more than 5% against the dollar in 2022.