October 22, 2024 04:05 GMT
MNI BRIEF: Bond Market Inflow Pushes Up China's External Debt
SAFE sees greater offshore yuan bond demand.
MNI (BEIJING)
The net inflow into the onshore bond market increased over USD80 billion in the first three quarters, while the net purchase of foreign investors contributing about USD90 billion in bond-related external debt in H1, pushing China’s external debt balance to USD2.54 trillion, up 4% from the end of 2023, officials said. Domestic entities, such as companies and banks, slowed external debt repayment as expectations of U.S. Federal Reserve rate cuts grew, they added. (See MNI INTERVIEW: Yuan Rally To Depend On Stimulus, Fed- Guan Tao)
The total holdings of yuan-denominated bonds by foreign investors stands at USD640 billion, an historic high, but foreign investors’ share in the domestic stock and bond markets remains at about 3-4% with potential for further expansion, they continued.
Foreign investors are increasingly buying yuan-denominated bonds, officials at the State Administration of Foreign Exchange told reporters on Tuesday, noting China’s onshore stock and bond markets will remain attractive thanks to new economic stimulus measures and further relaxations of the fixed-income market.
The net inflow into the onshore bond market increased over USD80 billion in the first three quarters, while the net purchase of foreign investors contributing about USD90 billion in bond-related external debt in H1, pushing China’s external debt balance to USD2.54 trillion, up 4% from the end of 2023, officials said. Domestic entities, such as companies and banks, slowed external debt repayment as expectations of U.S. Federal Reserve rate cuts grew, they added. (See MNI INTERVIEW: Yuan Rally To Depend On Stimulus, Fed- Guan Tao)
The total holdings of yuan-denominated bonds by foreign investors stands at USD640 billion, an historic high, but foreign investors’ share in the domestic stock and bond markets remains at about 3-4% with potential for further expansion, they continued.
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