Bank of Korea invests US$300 mln in China's A-shares
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E-mail Xinhua, July 1, 2012
Bank of Korea (BOK), South Korea's central bank, said Sunday that it invested 300 million U.S. dollars into China's A-shares last month in a bid to diversify its foreign reserves.
In June, the BOK's 300 million-dollar quota under the Qualified Foreign Institutional Investor (QFII) program was all invested into the Chinese A-share equity market, according to the central bank.
The BOK selected various asset managers, including some local ones, to trust the funds for the QFII as the indirect investment can boost competition for higher investment returns among asset managers, secure diverse investment strategy and enhance risk management.
The investment will help the bank diversify its foreign reserves and prepare for the possible internationalization of the Chinese yuan, the BOK said, noting that it will lay the ground for strengthening the financial cooperation between the two countries.
The BOK was granted the QFII license by the China Securities Regulatory Commission (CSRC) in Dec. 2011, before being awarded a combined quota of 300 million dollars by the State Administration of Foreign Exchange (SAFE) in March 2012.
Meanwhile, the BOK already began buying China's government bonds on the over-the-counter (OTC) market from late-April. The bank was approved by the People's Bank of China (PBOC) to purchase as much as 20 billion yuans (around US$ 3.2 billion) worth of such bonds in January.
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