The People's Bank of China issued a document to support and regulate cross-border interbank financing business in RMB.

To improve the opening-up level of capital accounts, develop the RMB offshore market, and improve the macro-prudential management of cross-border capital flows, the People's Bank of China issued a relevant notice on February 26 to support domestic banking financial institutions in conducting RMB cross-border interbank financing business with overseas institutions in a standardized manner.

RMB cross-border interbank financing is an important channel for domestic banks to provide RMB liquidity to the offshore market and promote the cross-border use of RMB.

It is reported that the Notice on Relevant Matters Concerning the RMB Cross-border Interbank Financing Business of Banking Financial Institutions issued by the People's Bank of China this time covers all types of RMB cross-border interbank financing business. It links the net lending balance of RMB cross-border interbank financing of banking financial institutions with their capital level and capital strength to promote the reasonable conduct of business. The notice sets relevant parameters for macro-prudential management and conducts counter-cyclical adjustments according to market conditions. The setting of relevant parameters fully takes into account market demand and the operating conditions of banking financial institutions, which is conducive to providing stable liquidity to the RMB offshore market and promoting the cross-border use of RMB.

A relevant person in charge of the People's Bank of China said that the People's Bank of China will comprehensively consider factors such as the development of the RMB offshore market, the situation of cross-border capital flows, and the business operations of banks, and adjust the parameters in a timely manner. The management logic of the notice is consistent with previous measures such as overseas loans and overseas lending, and it is an effective supplement to the full-caliber cross-border financing macro-prudential management.

Next, the People's Bank of China will steadily promote the implementation of the notice and effectively play the positive role of cross-border interbank financing business in serving the real economy and promoting the healthy development of the RMB offshore market.

*Content source: Xinhua News Agency

This article is from the WeChat official account "Comprehensive Service Port for Zhejiang Enterprises Going Global", author: Zhejiang Enterprises Going Global.