Shanghai becoming center for yuan assets: PBOC governor

Tracy Li
Global institutional investors can easily conduct cross-border investment and financing activities in the city, which also offers a range of risk-management options.
Tracy Li

Shanghai is becoming a global center for yuan-denominated financial assets, Yi Gang, governor of the People's Bank of China, said at the Lujiazui Forum in Shanghai via a video on Thursday.

Global institutional investors can easily carry out cross-border investment and financing activities here in the city, Yi noted at the opening ceremony of the two-day financial event.

At present, China's economic fundamentals are good, and its monetary policy is still in normal range. Compared with other developing countries, the interest rate of the yuan is low, but its exchange rate for major currencies is still relatively high. All of this has made yuan-denominated assets a darling of global investors, governor Yi noted.

Meanwhile, Shanghai is becoming a risk management center for yuan financial assets.

As long as domestic and overseas backers invest in yuan assets, they must carry out continuous risk diversification and management. And the city is seeing remarkable improvement of market elements for conducting relevant risk management operations.

In terms of pricing, all types of yuan assets can be priced continuously. And sufficient liquidity in the yuan financial market enables investors from other markets to buy and sell yuan assets at any time.

For risks hedging, a basket of risk management tools including financial futures, commodity futures, interest rates, exchange rates, derivatives and other risk management tools can be utilized by global investors, the central bank official said.

Shanghai has made great efforts to strengthen the transparency of information disclosure on relevant trading. Regulatory requirements have been continuously improved over the past few years, which has lifted global investors' confidence in yuan assets.

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