China’s central bank has pledged to open the country’s financial markets further to foreign investors this year as part of government efforts to strengthen the yuan’s international role and encourage capital inflows. Authorities will deepen reform of the exchange rate regime and “steadily push forward the convertibility of the yuan under the capital account” this year, the People’s Bank of China said in a statement. Analysts said the focus of the central bank’s promise on yuan convertibility will be on attracting foreign investors into the country’s financial markets rather than allowing domestic money to move overseas, given the current pressure on capital outflows. “The opening this year will mainly be to open the stock and bond markets to foreign investors, with the target initially being institutional investors… (especially) long-term investors such as pension funds,” Lu Zhengwei, a Shanghai-based economist with Industrial Bank told Caixin.
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