BEIJING -- China announced Sunday to connect its interbank and exchange bond markets amid efforts to promote the free flow of capital and facilitate monetary policy transmission and macro-economic regulation.

Qualified investors will be allowed to trade in both the interbank and exchange bond markets via relevant connect infrastructure, according to a statement jointly issued by the People's Bank of China and China Securities Regulatory Commission.

At the end of June, the country's total outstanding bonds stood at 107.8 trillion yuan (about $15.4 trillion), ranking second in the world.

The country's interbank bond market saw 23.5 trillion yuan in spot transactions in June, up 36.49 percent year on year, while spot transactions in the exchange market more than doubled from one year earlier to 1.4 trillion yuan, data from the central bank PBOC showed.