BEIJING, Feb. 26 (Xinhua) -- Overseas institutional investors raised their RMB-denominated bond holdings on China's interbank bond market to 3.87 trillion yuan by the end of January, reported Xinhua-run China Securities Journal on February 24.
They added around 202.8 billion yuan of RMB-denominated bond holdings on the interbank bond market in January, marking the fifth consecutive month of their holdings increase since September 2023.
Statistics with the Shanghai Head Office of the People's Bank of China showed that their overall holdings accounted for 2.8 percent of the outstanding bonds on China's interbank bond market.
By the end of January, overseas institutional investors held around 2.33 trillion yuan of T-bonds and 0.84 trillion yuan of policy bank bonds, making up 60.2 percent and 21.7 percent of their gross bond holdings on the interbank bond market.
Continued overseas capital influx reflected their holders' optimism towards the Chinese economy, said Ming Ming, chief economist with CITIC Securities, highlighting that no matter which type of RMB-denominated assets they have selected, their investment revealed their confidence in the value of RMB and China's economy.
Guan Tao, global chief economist with BOC International (China) Co., Ltd. thought that alongside the gradual economic growth recovery in China, the relatively stable exchange rates of RMB provided sufficient margin of safety for overseas institutions to purchase RMB-denominated financial assets.
When the U.S. Fed's interest rate hiking cycle might be approaching an end, the recently retreated U.S. government bonds yield indicated higher returns from RMB-denominated bonds after offsetting related risks and further sharpened the attractiveness of RMB-denominated assets, noted Guan.
In January, five more overseas institutional investors entered China's interbank bond market and by the end of January, the total number of overseas institutions trading on the interbank bond market reached 1,129 ones, with 555 ones entering via China Interbank Bond Market Direct scheme, 824 ones entering via the Bond Connect program, and 250 ones entering via both of the two channels.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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