Clearing data suggests PBOC buying government debt – Bloomberg
According to the latest report carried by Bloomberg on Thursday, the clearing data prompted speculations that the People’s Bank of China (PBOC) may have resorted to government bond-buying from domestic banks last month.
Key takeaways
“Sovereign bonds held by “other” investors -- a category that includes central banks and clearing houses -- rose by 196.5 billion yuan to 1.78 trillion yuan ($256 billion) last month, according to data released by China Central Depository & Clearing Co. last week.
Policymakers have frequently said in the past they do not intend to enact the kind of bond-market purchases seen in developed markets and have restricted stimulus measures throughout the coronavirus crisis to moderate trimming of market interest rates and a more generous liquidity policy. But they have flagged a willingness to support the government’s fiscal policy.
The PBOC is forbidden by the nation’s central bank law from purchasing government debt in the primary market.”
Market reaction
The above report has little to no impact on the Chinese yuan, as USD/CNY trades flat at 6.9375 so far this Thursday.
Reprinted from FXStreet，the copyright all reserved by the original author.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
Hot
No comment on record. Start new comment.