January 10, 2025 01:49 GMT
MNI BRIEF: PBOC Suspends Bonds Trades As Yields Drop
MNI (BEIJING) - The People’s Bank of China has suspended bond purchases as treasury yields continue to fall fuelled by policy easing expectations.
According to a statement on the PBOC’s website on Friday, the Bank will suspend bond purchases in its open market operations starting from January 2025 considering “the persistent supply shortage in the government bond market” and the resumption of the operations will be considered based on the supply and demand situation in future.
The move is believed to be a response to a rapid fall of treasury yields in recent months, with the 10-year treasury rate dropping to a record low below 1.6%. (See MNI Policy: PBOC Watching Bond Rally, Starts Stress Tests)
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