WB Issues “Mulan Bonds” in China, Issue Oversubscribed

WB Issues “Mulan Bonds” in China, Issue Oversubscribed

WB Issues “Mulan Bonds” in China, Issue Oversubscribed

The World Bank (WB) Wednesday issued landmark bonds denominated in special drawing rights (SDR) in China’s interbank market.

The 3-year SDR bonds worth SDR 500-M SDR (US$700-M) were billed as “Mulan bonds.”

China’s RMB Yuan, or renminbi, will be used as the settlement currency.

It is the 1st issuance of SDR bonds since Y 1981.

A much bigger wave of such bonds could be expected as the WB plans to sell as much as SDR 2-B of such bonds in China.

The SDR is the reserve currency administered by the International Monetary Fund (IMF), the price of which is determined by a basket of currencies including the USD, Euro and Japanese Yen.

The RMB Yuan is scheduled to be included in the basket in October, which will be a milestone in the internationalization of the currency.

The People’s Bank of China (PBOC), the central bank, said the bonds were heavily oversubscribed, with about 50 domestic and overseas financial institutions.

Interbank debts denominated in SDR will enrich China’s bond market and help promote the global use of the currency, the PBOC said, adding that it will continue to improve SDR bond trading and propel the opening up of China’s market.

Stay tuned…

The following two tabs change content below.

Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

You must be logged in to post comments :