The People’s Bank of China granted Luxembourg a 50 billion renminbi ($8.1 billion) qualified foreign institutional investor quota.
The Chinese central bank announced the quota, the first RQFII for Luxembourg, on its website.
Qualifying investors in Luxembourg will be able to directly invest up to 50 billion renminbi total into the mainland Chinese capital market. The RQFII scheme was launched in Hong Kong in 2011, and quotas have since been granted to a number of markets including London, Paris and Singapore.
“The granting of the RQFII quota again demonstrates China’s recognition of the Luxembourg financial center as one of Europe’s main hubs for international renminbi business,” said Pierre Gramegna, Luxembourg minister of finance, in a news release issued by Luxembourg for Finance — an agency that develops the financial center — and the Association of the Luxembourg Fund Industry. “We are proud to play such a significant role in the process of the internationalization of the renminbi.”
Luxembourg has the most renminbi deposits, at 61.5 billion renminbi, in Europe, as well as the most renminbi in investment strategies, at 296.3 billion renminbi, through UCITs and other investment vehicles, the news release said. The Luxembourg Stock Exchange has the most dim sum bonds — bonds issued outside of China but denominated in renminbi — listed in Europe, with a market share of 12% of global listings.