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Bank of China launches first QDII fund

(Shenzhen Daily)
Updated: 2006-07-31 11:18

Bank of China launched its first fund for investing clients' money overseas on July 28.

The bank said in a statement it would immediately start selling a fund using its US$2.5 billion quota under the country's Qualified Domestic Institutional Investor (QDII) program.

Corporate investors can make purchases from July 28 through August 9, after which any investor will be able to put money into the fund until Sept. 8, the bank said.

The government approved an initial batch of US$4.8 billion in QDII quotas July 21, which let three banks convert customers' yuan into foreign currency to invest overseas.

One of the other two banks, Industrial and Commercial Bank of China (ICBC) announced the launch of a fund Thursday. Bank of East Asia is yet to launch its product.

Analysts expect the capital outflows resulting from the program to ease some of the upward pressure on the yuan, and to slow the pace of expansion of the country's foreign exchange reserves, the world's largest.

Domestic media reported on July 28 that quotas under the program could reach US$10 billion this year.