China Bonds Fall as Yuan Drop Fuels Concern Outflows to Quicken
- Market disappointed by absence of reserve-ratio cut: ANZ
- Bond yields rebound from record low reached on Thursday
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China’s government bonds fell on concern a weaker yuan will spur capital outflows, impacting the availability of funds in the financial system.
In a sign of worsening outflows, the People’s Bank of China sold a record amount of foreign currency in December, a report showed Friday, as the central bank stepped up yuan purchases to stem the currency’s slide. The yuan has fallen 1.3 percent this month after dropping 4.5 percent in 2015. The PBOC boosted cash injections in its open-market operations as the seven-day repurchase rate rose the most since November last week.