A view of Hong Kong Photo: VCG

The People's Bank of China (PBC), the country's central bank, issued 5 billion yuan ($723 million) worth of bills in Hong Kong on Tuesday, a move to further consolidate the international financial hub's status and promote the yuan's internationalization, experts said.

The maturity date for the bills is September 21, or the closest coupon payment date, and the interest rate came in at 2.2 percent, according to the PBC's website.

The issuance was well-received by overseas investors, with total bidding reaching about 30.2 billion yuan, over six times the value issued, the central bank said, which reflected the attractiveness of yuan-denominated assets and strengthening confidence of overseas investors in the rebound of Chinese economy.

The move, a regular issuance, aims to enrich yuan-denominated investment products with high credit ratings in Hong Kong and improve the yield curve of the yuan in the region, the central bank said. 

The PBC will encourage domestic financial institutions, enterprises and other entities to issue bonds in yuan in offshore markets.

Tan Yaling, head of the China Forex Investment Research Institute, told the Global Times on Tuesday that the central bank's move will further consolidate Hong Kong's status as a major international financial center and promote the yuan's internationalization.

Being the world's largest offshore yuan trading hub, Hong Kong settles roughly 75 percent of global yuan trading outside the Chinese mainland.

"The move will also help cushion the pressure on the exchange rate of the yuan to maintain the rate at a reasonable level by stabilizing market expectations, as central bank bills can be used as an effective tool to manage liquidity," Tan noted.

As of 11 am on Tuesday, the offshore yuan had risen by 175 basis points over a period of the last three trading days, amid the continuous decline of the US Dollar Index, industry data showed.

Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said the yuan doesn't have much scope left to depreciate against the dollar, considering the mounting headwinds on the US economy and the continuous recovery of the Chinese economy this year.

Wang predicted that the yuan is likely to rebound 5 percent against the dollar to about 6.6 this year.

The PBC has been quickening its pace in issuing yuan-denominated bills in Hong Kong since the start of this year. It issued 25 billion yuan worth of bills in Hong Kong in two batches in February. One is worth 10 billion yuan with a maturity of three months, or 91 days. The other is worth 15 billion yuan with a maturity of one year.

Since November 2018, the PBC has established a standard mechanism for issuing central bank bills in Hong Kong.