The Monetary Authority of Macao (AMCM) signed an agreement with the People's Bank of China (PBOC) which enables AMCM to acquire RMB bonds to achieve diversification in investment. In order to enhance investment management for reserves and to achieve the long term goal of appropriate diversification for its asset portfolio, AMCM proposed to relevant government agencies of the Mainland to acquire assets denominated in RMB. The proposal had a positive response of PBOC. After a few rounds of negotiation, the application of the MSAR Government for quota of the RMB bond market to invest part of its funds was successful and confirmed. The AMCM representatives signed the "Chinese (Mainland) Inter-bank Bond Market Agency Agreement" with the PBOC on 28 March 2012. In accordance with the provisions therein, AMCM can purchase RMB bonds up to RMB 10 billion via the bond transaction platforms under the jurisdiction of the PBOC. AMCM can directly invest in the Mainland inter-bank bond market in a timely manner according to the strategy formulated for its reserves. After the signing of the above mentioned agreement which is in principle by nature, AMCM will shortly formulate detailed market operation arrangement with the responsible units of the PBOC. It is generally believed that the move can broaden investment channel. Simultaneously, AMCM will be able to make use of the opportunity offered by the rise of the capital market of the Mainland. Through the introduction of a series of stable and secure RMB financial products, AMCM is able to further fine tune its function in fund management.
