China’s Key Bond Yield Slides With Yuan on Surprise Rate Cut

(Bloomberg) — China’s benchmark sovereign yield dropped to the lowest in more than three years and the yuan slid, after the central bank unexpectedly cut a key policy interest rate.

The 10-year yield dropped seven basis points to 2.56%, the lowest since April 2020, while China’s currency weakened in both onshore and offshore trading. The People’s Bank of China lowered the rate on its one-year loans, or medium-term lending facility, by 15 basis points to 2.5% on Tuesday. A short-term policy rate was also cut.