The People’s Bank of China had signed an agreement with the State Bank of Pakistan to help Pakistan invest in its local debt market.
Pakistan now joins a growing list of central banks that will invest in China’s interbank market.
The central banks of Japan, South Korea, Singapore, Thailand, Hong Kong and Indonesia are among those who invest in China’s bonds onshore.
China has allowed foreign central banks to invest in its domestic interbank bond market since 2010 as part of efforts to widen investment avenues for foreign yuan asset holders and promote the international use of the Chinese currency.
Besides central banks, China also allows yuan clearing banks in Hong Kong and Macau and foreign banks that help settle cross-border trade in yuan to invest in its interbank bond markets.
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