LONDON: Britain deepened its financial links with China on Wednesday with the launch of Europe’s first yuan-denominated money market fund, which allows investors to get direct exposure to China’s interbank lending market.

The exchange-traded fund from China Construction Bank International, China’s second largest bank, is listed on the London Stock Exchange and can be traded in sterling, euros and yuan, Britain’s government said.

London has been keen to attract Chinese banks and encourage offshore trade in the yuan to bolster its position as the world’s main centre for foreign exchange trading.

Last year Britain became the first Western government to issue a yuan-denominated bond. On Tuesday the finance ministry’s chief economist said he viewed the yuan’s possible inclusion in the International Monetary Fund’s currency basket as a “very live” issue.

“The launch of this (fund) will provide further opportunities for British and other global investors to invest directly into China,” said Andrea Leadsom, a junior British finance minister.

Published in Dawn, March 26th, 2015

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