Financial analysts said the market response to the People's Bank of China's issuance of central bank bills in Hong Kong demonstrates the attractiveness of yuan-denominated assets and the confidence of global investors in the Chinese economy.

On Tuesday, the PBOC, the country's central bank, issued six-month central bank bills worth 5 billion yuan ($720 million) in Hong Kong, with the winning bid interest rate of 2.2 percent. The application amount is 19 billion yuan, making the over-subscription 3.8 times compared to the issuance amount.

"Global investors are anticipating that mainland authorities will relax some of the COVID measures next year. The theme of border-reopening may be a catalyst for boosting the domestic economy next year," said Conita Hung, investment strategy director at Tiger Faith Asset Management.

"If the mainland reopens its borders, it may boost domestic consumption and investment. Investors are anticipating this will happen," Hung said.

Referring to the attractiveness of yuan-denominated assets, Hung said this depends on the trend of the renminbi in 2023.

"If the economy of the United States dips into recession next year, then US interest rate hikes may not be so drastic as they have been in the past two years. When the pace of US interest rate hikes slows down, the strength of the US dollar may weaken and that may boost the renminbi exchange rate next year," she added.

The central bank bill issuance was widely welcomed by banks, mutual funds and other institutional investors from countries and regions in the Americas, Europe and Asia. International financial organizations also actively participated in the subscription.

"The over-subscription amount indicates investor confidence in China's sovereign rating and the Chinese market. Investor confidence is gradually coming back," GROW Investment Group Chief Economist Hong Hao said.

Hong said: "With the easing of monetary policy, the economy should be restored. Border reopening particularly will be very important to attract foreign investment into China again."

Hong also said whether the renminbi will sustain a rising trend in 2023 depends on the strength of the Chinese economic recovery next year.

The central bank bills are the 12th issuance of this year. The maturity date is June 22 next year.