Foreign Investors Buying Up Yuan Bonds To Reduce Volatility

Overseas central banks and sovereign wealth funds are continuing to increase their holdings of yuan bonds despite rising U.S. bond yields, according to 21st Century Business Herald. Foreign institutions held CNY3.19 trillion of bonds in the interbank market by end-September, accounting for about 2.4% of the total custody volume, according to the latest data by the People's Bank of China Shanghai office. This means foreign investors purchased about CNY10 billion yuan bonds in September, marking the first monthly increase in holdings since June. Foreign investors are buying the relatively stable yuan bonds to reduce portfolio volatility amid falling U.S. bond prices, the newspaper said.