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

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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.