Some CNY600 billion in special..........>

CHINA PRESS: Some CNY600 billion in special treasury bonds will mature at the

end of this month and are likely to be rolled over, the 21st Century Business

Herald reported Friday. A total of CNY1.55 trillion in special treasury bonds

were issued in 2007 to withdraw abundant liquidity in the market when

international payments were showing good two-way flows, the report said. But in

the current situation, particularly with banks' excess reserve ratio as low as

1.3%, the market is relying on the central bank for injections of liquidity, so

the extension of the special bonds will worsen major liquidity pressure as it

will further drain liquidity from the market, the report argued. The bond market

was sluggish in the first half of the year and the issuance of treasury bonds

slowed, so rolling over the special treasury bonds would increase the pressure

on the market from treasury bond supply for the rest of the year, the report

added. (21st Century Business Herald)