RT.com
20 Nov 2023, 08:13 GMT+10
Low interest rates have sparked a global rush to borrow in China, the outlet has said
Global companies are reaping record profits through yuan-denominated bonds and are borrowing heavily from Chinese lenders at low interest rates, at a time when the cost of using Western banks is skyrocketing, Reuters reported on Friday.
According to the news agency, international companies and banks are raising record amounts of cash through Chinese 'panda' and 'dim sum' bonds denominated in yuan.
"While the fundamental story is not compelling for Chinese investors looking for growth, the depreciation of the yuan as well as the rate cuts result in a much cheaper cost of borrowing," said Fiona Lim, senior FX strategist at Maybank.
The uptick in China's borrowing market has made the yuan the world's second-biggest trade funding currency, ahead of the euro. The development reflects Beijing's ambitions to boost the yuan's share in global funding, Reuters added.
According to the report, the National Bank of Canada raised 1 billion yuan ($138.6 million) in October from the sale of a three-year panda bond at a coupon of 3.2%, while domestic interest rates stood at 4.5%.
The People's Bank of China (PBOC) has been encouraging banks to lend to international companies and has allowed broader use of the yuan outside the country, the outlet said.
"Panda bonds are steadily promoting the renminbi's function as a funding currency," the PBOC stated in a report last month.
The Chinese yuan showed record gains in September as its share in international payments surged to 5.8%, up from 3.9% at the beginning of the year, outperforming the euro for the first time, data from SWIFT revealed.
The growing share of the yuan in cross-border transactions reflects China's trend of shifting away from the US dollar, as well as Beijing's efforts to promote the use of its national currency.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Canada Standard news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Canada Standard.
More InformationIsrael intensified its deadly bombardment of the Gaza Strip Saturday as renewed fighting with Hamas entered a second day following ...
ARLINGTON, Virginia: This week, the conservative U.S. political network Americans for Prosperity Action (AFP Action), led by billionaire Charles Koch, ...
BEIJING, China: The Chaoyang District Intermediary Court in Beijing has begun compensation hearings for the Chinese relatives of those who ...
Israel resumed its military operation in the Gaza Strip on Friday with heavy bombardments. As strikes continue, the United States ...
LIVINGSTON, Kentucky: CSX railroad said that a failed wheel bearing on a train car caused a derailment on November 22 ...
HELSINKI, Finland: After Finland joined the North Atlantic Treaty Organization (NATO) earlier this year, hundreds of migrants from the Middle ...
Kuala Lumpur [Malaysia], December 4 (ANI): The Indian junior men's hockey team will look to kick off their FIH Hockey ...
Manchester [UK], November 4 (ANI): Following his side's draw against Tottenham Hotspur, Manchester City boss Pep Guardiola said that it ...
New Delhi [India], December 4 (ANI): Five Indian weightlifters will be representing the country at the International Weightlifting Federation (IWF) ...
New Delhi [India], December 4 (ANI): Though the recently-concluded T20I series between India and Australia lacked star power, with several ...
Green Bay (Wisconsin) [US], December 4 (ANI): Pop star Taylor Swift attended Travis Kelce's Chiefs Game Against the Packers in ...
(Photo credit: Stephen Brashear-USA TODAY Sports) With Major League Baseball's winter meetings underway in Nashville, the Mariners and Braves announced ...