The British government successfully issued a sovereign bond in China's currency, the renminbi (RMB), on Tuesday, making it the first western country to issue the largest ever non-Chinese RMB bond.
The RMB three billion bond, equivalent to approximately 300 million pounds (USD 477 million), has a maturity of three years and will be used to finance Britain's reserves, the Department of Treasury said in a statement.
Britain only holds reserves in USD, euros, yen and Canadian dollars, so today's issuance signals the RMB's potential as a future reserve currency, it noted.
The bond issuance, which saw strong demand from investors, also further cements Britain's position as the most important RMB market in the western world, and represents the next step in the governmentآ’s long term economic plan to establish Britain as the centre of global finance.
Finance Minister George Osborne said that "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.
"To do that, we need to make sure China's currency is used and traded here, as that will be not only good for China, but good for British jobs and investment too," he said.