TAIPEI, Feb 19 (Reuters) - Chinatrust Financial is set to price Taiwan's first Renminbi (RMB) bond at an indicative yield of 2.9 percent, three sources familiar with the plan said on Tuesday.

Chinatrust, which has received regulatory approval to raise up to T$5 billion ($168 million) for the bond, has told some potential buyers about the indicative yield and asked about their interest, the sources told Reuters.

The indicative yield is roughly the same as those priced for similar dim sum bonds in Hong Kong, they said, adding Chinatrust is expected to announce the final yield as soon as Friday.

Chinatrust is beating rivals such as BNP Paribas and Deutsche Bank in issuing the first Chinese yuan bond in Taiwan. The market is expected to reach 2 billion yuan in the first year.

China and Taiwan signed an agreement in September for the establishment of a clearing system for yuan transactions on the island, setting the stage for local and foreign banks to launch the bond issue.

The agreement was an advance in China's efforts to promote use of its currency in overseas markets to match its rising clout as the world's second-largest economy.

All renminbi bonds, dubbed 'Formosa Bonds' in Taiwan and the equivalent of Hong Kong's dim sum bonds, will list on the Over-the-Counter (OTC) stock exchange.

(US$1 = T$29.686)

(Reporting by Roger Tung; Writing by Faith Hung; Editing by Richard Borsuk) Keywords: CHINATRUST RMBBOND/

(faith.hung@thomsonreuters.com)(8862 2500 4893)(Reuters Messaging: faith.hung.thomsonreuters.com@thomsonreuters.net)

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