WB plans first yuan bonds in China: report<\/p>\n
The World Bank plans to issue yuan-denominated bonds to raise
\nfunds for development projects in China, the Japanese daily,
\nYomiuri Shimbun said Sunday.<\/p>\n
The Bank has already begun talks with the government and the
\nPeople's Bank of China with an aim to start issuing the bonds by
\nDecember, the newspaper said.<\/p>\n
If the plan is carried out, the World Bank will be the first
\ninternational financial institution to issue such bonds in China,
\nit said.<\/p>\n
Beijing has previously allowed neither international financial
\ninstitutions nor foreign banks to issue yuan-denominated bonds in
\nthe country, the daily said.<\/p>\n
The Washington-based global financial body is considering
\nraising funds in China for spending on development projects, it
\nsaid.<\/p>\n
Under the plan, the yuan-based bonds will be issued through
\nthe International Finance Corporation, an arm of the World Bank
\nthat promotes private sector investment in developing countries,
\nit said.<\/p>\n
The funds will go to public projects in China and to private
\nfirms, as well as being used for technological assistance.<\/p>\n
The Bank is negotiating with China on the volume, timing and
\nperiod for the bonds, which it wants to carry long maturities.<\/p>\n
It has so far procured funds mainly in dollars for loans to
\nlarge projects in China, such as railway construction.<\/p>\n
If yuan-denominated bonds are issued, the risk from exchange
\nrate fluctuations is lowered in the event the Chinese government
\nrevalues or floats its currency in the future.<\/p>\n
The World Bank believes that with the issuance of yuan-based
\nbonds, China will have to strengthen cooperation with Japan, the
\nUnited States and Europe in trading and investment, which will
\nlead to stabilization of the international financial market, the
\ndaily said.<\/p>\n
In addition to the World Bank, the Asian Development Bank is
\nnegotiating with the Chinese government on issuing yuan-
\ndenominated bonds. --AFP<\/p>",
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