China Deploys Bond-Buying Tool First Time to Boost Liquidity
- Ministry of Finance buys one-year notes from secondary market
- Important symbolic move to support the market, Citigroup says
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China used a new tool to boost liquidity in its government-bond market for the first time Tuesday, purchasing one-year notes that had seen limited demand among investors.
The operation is part of a broader initiative to generate a reliable yield curve for risk-free government debt that can serve as a benchmark for borrowing costs across the economy. While China has more than 22.9 trillion yuan ($3.4 trillion) of government securities outstanding -- one of the world’s largest -- it has less liquidity than many developed nations.