![]() ![]() JPMorgan predicted last May that Chinese government bonds could receive at least $155 billion of investment flows should China’s market opening lead to their inclusion in various global indexes.“With the issuance by People’s Bank of China of its guidelines in February 2016 on the further opening of the China Interbank Bond Market (CIBM) for eligible foreign institutional investors, we have been monitoring China’s eligibility for inclusion in our indices,” Citi’s fixed income indices team said in a statement. Some market watchers have argued the moves to tighten restrictions on outflows could dampen foreign investment in China, as companies fear they will have trouble repatriating their profits.Īt the end of 2016, foreigners held about 870 billion yuan of Chinese bonds, just 1.5 percent of China’s 56.3 trillion yuan ($8.16 trillion) interbank bond market. Last week, China opened its forex derivative market to foreign investors, giving them a way to hedge foreign exchange exposure in the country’s bond market.Įncouraging capital inflows is part of efforts by Beijing to protect the yuan, which fell 6.5 percent against the dollar last year, and staunch a heavy and prolonged slide in its foreign exchange reserves.Īuthorities in recent months have announced a flurry of measures that made it harder to move funds offshore.
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