China Stabilizes Bond Market With Symbolic Interest Rate Cut
- Yields drop after central bank cuts costs on loans to banks
- Traders had been concerned about prospect of tighter liquidity
Outside the People's Bank of China headquarters in Beijing, China.
Photographer: Qilai Shen/BloombergThis article is for subscribers only.
China’s central bank has finally helped put the brakes on the downward spiral in government debt.
While Tuesday’s 5 basis-point reduction in the cost of one-year loans to banks was largely symbolic, it was the first such move since 2016. That was enough to soothe nerves in a market that’s been walloped by the prospect of tighter liquidity in the financial system.