BEIJING -- China has approved international commercial banks to issue RMB bonds for the first time.

The central bank said on Tuesday that HSBC and Bank of China (Hong Kong) have been approved to issue RMB bonds in the interbank bond market.

HSBC will issue bonds worth one billion yuan ($160 million) and Bank of China (Hong Kong) is allowed to issue 10 billion yuan of bonds, the People's Bank of China (PBOC) said.

In 2005 and 2013, China allowed overseas non-financial institutions such as the International Finance Corporation and the Asian Development Bank to issue RMB bonds.

Allowing international commercial banks to do so has diversified the RMB bond issuers and expanded their RMB financing channels, and the move could also encourage cross-border use of RMB, the PBOC said.