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MNI: PBOC Eyes Secondary CGB Trading To Support Issuance

MNI (Singapore)
(MNI)Beijing

The central bank will prefer a small-scale allocation to keep fiscal discipline in check, should it choose to enter the Chinese government bond secondary market.

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The People’s Bank of China is set to restart treasury trades on the secondary market after a 16-year hiatus as it prepares to support long-term Chinese government bond issuance over the next few years, however, it will aim to limit its role and maintain a small portfolio as it pushes fiscal discipline, policy advisors and economists told MNI.

Lian Ping, chairman at the China Chief Economist Forum, welcomed the potential move, pointing to the impending offer of the CNY1 trillion special treasuries this year, which provided a good entry point should the PBOC decide to enter the market. (See MNI INTERVIEW: China Eyes Significant Special Treasury Issuance)

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The People’s Bank of China is set to restart treasury trades on the secondary market after a 16-year hiatus as it prepares to support long-term Chinese government bond issuance over the next few years, however, it will aim to limit its role and maintain a small portfolio as it pushes fiscal discipline, policy advisors and economists told MNI.

Lian Ping, chairman at the China Chief Economist Forum, welcomed the potential move, pointing to the impending offer of the CNY1 trillion special treasuries this year, which provided a good entry point should the PBOC decide to enter the market. (See MNI INTERVIEW: China Eyes Significant Special Treasury Issuance)

Keep reading...Show less