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China Should Not Buy Debt to Boost Money: Newspaper

CHINA PRESS
MNI (Singapore)

China should not increase money supply through buying government bonds, something being done by western countries, as excess money entails a series of problems including faster inflation and capital outflow, He Qiong, a member of the Bank of China's yuan trading division in Shanghai, wrote in a commentary published by the PBOC-run Financial News. The Ministry of Finance should instead increase the frequencies of selling bonds and ensure weekly issuances and control rates through limiting the sizes of the issuances, He wrote. Financial authorities should increase coordination and communication with the central bank to minimize funds' negative impact on bond issuances and control the costs of selling bonds, He wrote. Authorities should also help stabilize bond yield curves through greater and more frequent purchases and help those holders of government bonds manage their positions, the newspaper said.

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