Move over USD, now Hong Kong is issuing Dim Sum Bonds as the World Bank promotes the Yuan for international finance
The World Bank which is supposed to be the economic extension of the United States is promoting Yuan denominated bonds. How much longer before the Yuan becomes the currency of exchange? China and Russia already settle their accounts in Yuan or Ruble and now it is on the verge of becoming a regional currency. Via Reuters:
The World Bank issued its first yuan-denominated bond, raising $76 million and trying to promote the use of the Chinese currency in international markets at a time when China's stake in the institution is about to increase.
The World Bank said in a statement on Wednesday the International Bank for Reconstruction and Development, its low-interest lending arm, had priced the two-year paper at 0.95 percent, representing the lowest yield so far on same-maturity dim sum bonds -- the nickname for yuan-denominated bonds issued in Hong Kong.
The offshore yuan market in Hong Kong has seen explosive growth in less than a year, with renminbi deposits in the former British colony surging more than 150 percent in the six months to October 2010. Global companies and institutions such as the Asian Development Bank, McDonald's Corp and Caterpillar have all issued yuan bonds.