China’s Central Bank Resumes Government Bond Purchases
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China’s central bank bought government bonds in its open market operations in October for the first time in 10 months.
The People’s Bank of China (PBOC) purchased 20 billion yuan ($2.8 billion) of government bonds last month while selling none, according to data released Tuesday.
The PBOC had suspended the practice at the start of the year because strong market demand was pushing up bond prices, putting downward pressure on yields. The resumption of bond trading, a standard tool for central banks to manage liquidity and interest rates, suggests a recalibration of its policy toolkit as market conditions stabilize.
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- In October, China's central bank bought 20 billion yuan ($2.8 billion) of government bonds for the first time in 10 months.
- This marks a cautious resumption of bond purchases after suspending them in January when yields were low.
- The move signals a recalibrated liquidity strategy as 10-year bond yields rebounded to 1.74% by October.
- The People's Bank of China
- The People's Bank of China (PBOC), also known as China's central bank, bought 20 billion yuan ($2.8 billion) in government bonds in October, its first such purchase in 10 months. This resumption suggests a policy recalibration as market conditions stabilize, following a period where strong market demand had led them to suspend bond trading.
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