The People’s Bank of China (PBoC) and the Bank of England (BoE) have formally entered into discussions to establish a reciprocal three-year currency swap arrangement, according to a statement on BoE’s website published on February 22.
The agreement would be used to finance trade and direct investment between the two countries and would make Britain the first G8 country to establish a swap line with China.
The National Development and Reform Commission is expected expand quotas for Chinese enterprises to sell debt in the offshore renminbi market as soon as the second quarter of the year, according to Asiamoney PLUS sources.
Changes would include a doubling of the quota from Rmb50 billion to Rmb100 billion (US$5.2 billion to US$10.5 billion) and reviewing applications on a case-by-case basis instead of approving all quotas at the same time.
India
The Reserve Bank of India published new guidelines which will allow non-financial companies to set up banks on February 22.
Criteria for eligibility includes setting up a holding company and having an initial minimum paid-up voting equity capital of INR5 billion (US$61 million) of which the holding company should hold at least 40%. In addition, foreign shareholding must be capped at 49% for the five years.
The RBI is accepting applications until July 1.
The central bank has also tightened up regulations regarding bank purchases of low coupon bonds, according to Reuters.
Bank will only be allow to invest in the bonds, which pay low coupons throughout the life of the note but offer a premium at maturity, if the issuer has a sinking fund which ensure there are funds to repay the bond in the case of a default.
Philippines
The government is considering selling inflation-linked bonds, according to a report in Business World.
“We are studying the issuance of inflation-linked bonds. Given the benign inflation outlook, the government will pay a low interest with this type of bonds,” national treasurer Rosalia V. de Leon told the newspaper.
Singapore
The PBoC approved Industrial and Commercial Bank of China (ICBC) as the renminbi clearing bank in Singapore on February 8.
Further details including when renminbi clearing services will be available and regulations regarding daily conversions limits are yet to be announced.
Taiwan
Banks began offering renminbi services on February 6 after Bank of China Taipei was approved as a clearing bank for the Chinese currency.
Forty-six banks began offering deposits, lending, remittance and wealth management services with the Central Bank of the Republic of China (CBC) reporting a day later that total renminbi savings at domestic banking units (DBUs) had reached Rmb1.3 billion.