BRITAIN on Tuesday launched a yuan-denominated sovereign bond, the first of its kind by a Western nation outside China and the largest ever non-Chinese issue.

    “The U.K. Government has today successfully issued a sovereign bond in China’s currency, the renminbi (RMB),” it said in a statement.

    “The 3 billion yuan [US$490 million] bond, which is equivalent to approximately 300 million pounds, has a maturity of three years” at a yield of 2.7 percent.

    The proceeds will be used to finance Britain’s foreign currency reserves.

    “Currently, Britain only holds reserves in U.S. dollars, euros, yen and Canadian dollars, so today’s issuance signals the RMB’s potential as a future reserve currency,” the statement added.

    The bond is part of government plans to boost links with China, bolster London’s market for yuan and underline the U.K. capital’s status as a global financial hub.

    Bank of China, HSBC and Standard Chartered arranged Tuesday’s bond sale.

    “The UK Government’s sovereign renminbi bond issue, the first by a Western country, has been a great success and will deliver value for money to taxpayers,” said George Osborne, Britain’s finance minister.

    “Our long-term economic plan is working, but the job isn’t done. We need to export to fast growing economies like China, and attract more investment to our shores,” Osborne said.

    (SD-Agencies)