China will steadily push forward market-oriented reform regarding its interest rates and exchange rates this year, according to a central bank report.

The People's Bank of China, the country's central bank, has pledged to further improve the issuance of credit to allow the financial sector to better serve the real economy, according to the report on China's financial stability.

It calls for market-led steps to carry out innovation to make the country's financial sector more diversified and efficient, while stepping up regulatory controls to guard against possible risks.

China will make solid moves to build a deposit insurance system to prevent systematic and regional financial risks, according to the report.

The central bank sets benchmark interest rates for the market and only allows them to float within the floor of lending rates and the ceiling of deposit rates. The central bank expanded the range twice in 2012.

Currently, banks can set deposit rates as high as 110 percent of the benchmark and offer loans at a 30-percent discount.

Offshore Yuan Bonds

Two major international lenders launched the first batch of offshore yuan-denominated bonds in Singapore on May 27, making the country the third offshore hub for such notes and consolidating its standing as an international financial center.

Standard Chartered PLC announced that it had raised 1 billion yuan ($163.36 million) through the offshore bonds. The three-year senior unsecured issuance was priced with a coupon of 2.63 percent after generating more than 3 billion yuan ($487.81 million) in orders from 75 investors across Asia.

HSBC said it had issued 500 million yuan ($81.6 million) of two-year fixed rate notes on the market, with yields of 2.25 percent. The funds will be used to finance the bank's expansion of yuan-based

lending assets, said Matthew Cannon, head of global markets at HSBC Singapore.

"We see this as another milestone for Singapore in the development of its status as an offshore yuan hub," said Ray Ferguson, CEO of Standard Chartered Bank Singapore.

Guy Harvey Samuel, Group General Manager and CEO at HSBC Singapore, said apart from the historic bond issue, the bank has also completed a number of other yuan transactions for its customers in Singapore through the new yuan-clearing facility.

According to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), in terms of the value of offshore yuan payments outside Hong Kong and the Chinese mainland, Singapore ranked second in April after the United Kingdom.

The yuan has become the 13th most-used currency overall with an all-time high market share of 0.74 percent, and payments denominated by the currency grew in value by 32.7 percent, in comparison with the average increase of just 5.1 percent across all currencies, according to the SWIFT.