The first sale in Hong Kong of Chinese government bonds denominated in the mainland’s yuan began Monday, adding to Beijing’s gradual campaign to expand the use abroad of its tightly controlled currency.

Banks took applications from the public for a portion of the 6 billion yuan ($875 million) issue. There was no immediate indication whether investor demand was strong. The bonds are to be issued Oct. 27.

The yuan, also known as the renminbi, or people’s money, does not trade on global markets. But Beijing has approved its use in trade between Hong Kong and some mainland cities and has signed a currency swap deal with Argentina and agreements to lend yuan to four other nations in emergencies.

The bond sale “will help the renminbi become an international currency, but the impact will not be huge,” said Zuo Xiaolei, chief economist of Galaxy Securities Ltd. in Beijing.

Hong Kong is Chinese territory but has its own currency and regulatory system and often is used by Chinese companies to deal with foreign investors.

Categories: Forex, Market News
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