In an endeavor to encourage the usage of Yuan in cross-border dealings, on Tuesday, China's central bank said that it will start giving permission to some foreign financial organizations to invest in China's interbank bond market.

For the globalization of the Yuan, coming up with additional channels for foreign investors, is considered as an important move.

Though, China has been supporting Yuan for settling intercontinental transactions, if foreign holders are restricted from investing the currency in majority of the Chinese markets, they would avoid using and investing in Yuan. In such a case, they are likely to choose a popular currency like Dollar in its place.

In a statement, the People's Bank of China said that the overseas financial groups that are taking part in the Yuan-settlement plan can reinvest their Yuan proceeds in the interbank bond market. This would be a channel, wherein they can invest and preserve the value of their Yuan investments.

In June, HSBC analysts wrote in a report, "It is crucial to develop offshore renminbi products and expanded channels by which foreign investors and enterprises may park their renminbi".

Economists predict that in order to make room for the rising size of the Yuan trade-settlement program, China is likely to expand its local capital markets.