The People’s Bank of China (PBOC) aims to strengthen the country’s sliding currency by issuing Rmb 20 billion ($2.9 billion) in central bank bills in Hong Kong’s offshore renminbi market, according to the Financial Times.
Selling central bank bills will help to raise borrowing costs for investors looking to short the currency in anticipation that its decline will continue. The currency recently hit its weakest level against the dollar in 10 years.
The plan was first announced in late September, but a new release on Wednesday details the timing and size of the issuance. On November 7, the PBOC will issue Rmb 10 billion in 91-day bills and a further Rmb 10 billion in one-year bills.
Although the bank has issued government bonds in Hong Kong before, this will be the first time it has sold central bank bills in the special administrative territory.