A UNIT of the World Bank will issue bonds denominated in special drawing rights (SDR) in China’s interbank bond market, China’s central bank said Friday.

    The International Bank for Reconstruction and Development will issue 2 billion SDR (US$2.79 billion) in bonds, the People’s Bank of China said on its website. The timing and terms of the bond issuance will be based on market conditions, the World Bank said.

    “This is a landmark development for China’s bond market and for the SDR as an international reserve asset,” said Jim Yong Kim, World Bank Group president, in a statement. The issuance will help promote the use of SDRs and “increase Chinese investors’ access to foreign currencies in the domestic bond market,” he said.

    The announcement comes as the International Monetary Fund (IMF) is scheduled to officially include the yuan as the fifth global reserve currency in its SDR basket in October, a milestone in a decades-long ascent toward international credibility for the yuan.

    Created in 1969, the SDR basket currently consists of the U.S. dollar, euro, yen and British pound, serving to supplement nations’ official foreign exchange reserves and used as an accounting unit usually deployed in bailout packages. (SD-Agencies)