China's central bank Sunday announced the approval of two pioneer multilateral financial groups to issue their first batch of yuan-denominated bonds on the Chinese mainland.

The International Finance Corporation (IFC) and the Asian Development Bank (ADB) have been allowed to issue their initial batch of yuan-dominated bonds of 1.13 billion yuan (140 million US dollars) and 1 billion yuan (124 million dollars), respectively.

An official with the People's Bank of China (PBOC) said allowing international multilateral financial institutions to issue yuan-denominated bonds is crucial for China to develop its financial market.

The move will help promote the internationalization of China's bonds market, as the two groups are experienced in helping burgeoning market-oriented countries open their capital market, he said.

By expanding the proportion of direct financing, it will improve the unbalanced financial structure, he said.

This move also blesses domestic companies with fewer risks when getting loans. Yuan-denominated ones are less affected by the frequently changing forex rate in the global financial market, the official said.

These two institutions will also benefit from this move as they can enjoy new and more diversified sources of capital, he said.

Source: Xinhua