China expanded its support for the beleaguered yuan with a plan to issue a record amount of bills in the Hong Kong market to mop up excess liquidity.

The People's Bank of China will issue central bank bills worth 60 billion yuan ($8.18 billion) in Hong Kong on Jan 15, which experts said sends a policy signal of strengthening offshore renminbi liquidity management and stabilizing the yuan exchange rate.

Chinese investors are heavily purchasing Hong Kong mutual fund products that invest overseas, particularly in bonds, following expanded cross-border trading opportunities. The Mutual Recognition of Funds (MRF) scheme has become a significant outlet due to higher quotas for mainland investors,

The People’s Bank of China will issue central bank bills in Hong Kong next week, a tool that is typically used to stabilize the yuan’s exchange rate in the offshore market.

Chinese investors are buying up large amounts of Hong Kong mutual fund products that invest overseas, particularly in bonds, after authorities expanded a cross-border trading channel this month and opened an avenue to get better yields.