Hungary said on Wednesday it will issue bonds denominated in yuan, a first for any central or eastern European country.

Hungary hopes the move, based on a memorandum of understanding signed in Beijing by Prime Minister Viktor Orban and Bank of China president Tian Guoli, will help raise money from investors in Asia, especially China.

The Hungarian economy ministry said that the "major milestone" will also lay the foundation for firms and banks in Hungary and eastern Europe to issue bonds in the Chinese currency.

China, the world's second largest economy, is pushing to give the yuan, also known as the renminbi, the status of a world currency. Last month the Bank of China opened an office in Budapest.

Orban's visit also saw the signing of a deal Tuesday for China to finance, via a loan, 85 percent of a 1.5 billion-euro ($1.6-billion) upgrade of a rail line between Budapest and Serbia's capital Belgrade.

Foreign Minister Peter Szijjarto said the deal will help Hungary "play a key role in forwarding Chinese goods from the ports of Greece to Western Europe through Hungary in the swiftest possible way."

pmu/stu/jh

BANK OF CHINA