MNI BRIEF: China Yields Will Reflect Fundamentals - PBOC
MNI (BEIJING) - China’s government bond yields will eventually reflect the improvement in expected economic fundamentals, Zou Lan, director at the PBOC's Monetary Policy Department, told reporters on Tuesday.
The central bank has temporarily suspended the purchase of government bonds to avoid exacerbating market fluctuations, Zou added. Authorities have strengthened market supervision and repeatedly warned participants of risks to promote steady movement in the market, Zou said.
The People’s Bank of China is signalling its intent to keep the yuan exchange rate stable to the dollar for now, but any worsening in trade tensions with the U.S. over the rest of the year would be likely to prompt a steady but gradual depreciation of the currency, policy advisors and traders recently told MNI. (See MNI: PBOC Underpinning Yuan, But US Tariffs Key)