As the Chinese renminbi is due to join the SDR basket of reserve currencies in October this year, the market is actively preparing the issuance of SDR-denominated bonds.

It is reported that China's interbank market will soon see a new breed of bond – the bond denominated in SDRs, to be issued by the world bank while China Development Bank and Industrial and Commercial Bank of China (Asia) Limited will also issue SDR-denominated bonds in the interbank market and the free trade zones.

The research team at ANBOUND Consulting is of the view that given that Renminbi will soon join the SDR currency basket, China is planning to issue SDR-denominated bonds.

Such bonds can play unique roles, but its prospects are also facing many challenges, therefore, the market must stay calm and remain cautious.