The renminbi is making strides on its way to internationalization, following the latest revision of rules on the scope of foreign institutions’ investment, a research team said on June 23.

The National Interbank Funding Center under China’s central bank, on June 21 revised regulations to allow foreign institutions to invest in Negotiable Certificate of Deposit (NCD), an important funding source for banks, in China’s interbank market.

The access expansion may have limited short-term impact, but it represents an important step toward renminbi internationalization, China International Capital Corp. (CICC) said in a research note.

China’s central bank opened the interbank bond market to foreign central banks in July 2015 and refined the access procedures in April 2016. It also opened the market to non-official foreign institutions in February, covering foreign commercial banks, insurers, securities companies and fund managers.

It may take time for foreign investors to adapt to the access procedures as well as renminbi volatility. Their participation may increase at a slow pace in the beginning, CICC said.

“However, the action marks China’s continued efforts to open its financial markets and increase the investability of the renminbi,” it added.

On June 22, the Monetary Authority of Singapore announced that it will include renminbi investments as part of its official foreign reserves starting from this month.

Despite the recent exchange rate volatility, the latest development shows that renminbi internationalization is still under way. As it plays an increasingly important role, the foreign demand for the renminbi assets tends to grow, according to CICC.