World Bank to issue bonds in China

The Financial Times reports the World Bank is to issue bonds in China backed by the International Monetary Fund’s currency basket for the first time, in a move that aims to revive the market for such bonds and further China’s goal of internationalizing the renminbi. The bonds, to be sold into the mainland market, will be settled in renminbi, but will be backed by the IMF’s special drawing rights, a currency basket that the Chinese currency will join in October to sit alongside the dollar, euro, sterling and yen. The renminbi’s addition to the SDR, whose composition is reviewed every five years, marks a milestone in China’s integration into the international monetary system as well as a sign of international support for Beijing’s efforts to liberalize its markets.