China Cuts Local Government Bond-Rate Guidance

As China’s government presses local authorities to accelerate infrastructure projects to bolster the economy, the Finance Ministry lowered its guidance on interest rates for local government bonds, reducing their borrowing costs.

The Finance Ministry is requiring that government units issue bonds at a minimum spread of 25 to 40 basis points, or 0.25 to 0.40 percentage points, above the five-day average yield of central government bonds of the same maturity, people close to the matter told Caixin, citing a Tuesday notice from the ministry to market participants.