The number of foreign borrowers of yuan breaks records

With a lower interest rate in China, which is seeking to ease its already loose monetary policy, foreign borrowers can reap more benefits, resulting in a record $10.4 billion offshore yuan bond issuance, Business Insider writes.

Thanks to China's monetary easing, a growing number of foreigners are willing to borrow the yuan at a relatively lower rate, which contributes to the globalization of the yuan at the expense of the US dollar,

Since the beginning of 2023, international borrowers have issued offshore yuan bonds (aka "panda bonds") worth about $10.4 billion, which remain in China's domestic interbank market.

But the Chinese government was forced to ease its policy due to the economic downturn, as a result of which China's central bank recently cut interest rates.

Foreign borrowers such as the Mercedes-Benz Group and the Hungarian government did not fail to take advantage of this.

The interest of foreign borrowers is fueling the internationalization of the yuan - increasing its use and weakening the dominance of the US dollar in trade and central bank reserves.