China is mulling policies to allow foreign institutions to invest directly in renminbi in China, China Business News reported on Friday.

Li Bo, director of the Monetary Policy Bureau at the People's Bank of China, was quoted at a financial forum in Shanghai Thursday. Li didn't give a specific timetable for the new policy.

One industry insider said there was a huge demand for renminbi from foreign institutions' direct investments. However, the supervision must be very strict to guard against speculative capital inflows, the source told the paper.