China Bond Outflows Resume as Foreigners Return to Selling
- Global funds cut holdings to lowest level since December 2020
- Outflows may persist in the first half of 2023: Deutsche Bank
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Overseas funds returned to selling China’s bonds in January after a one-month pause, underscoring the relatively unattractive yields on yuan-denominated debt as Beijing keeps monetary policy loose to support growth.
Foreign holdings of Chinese onshore bonds in the interbank market including sovereigns, policy bank debt and other fixed-income securities slid by 106.5 billion yuan ($15.5 billion) to 3.28 trillion yuan, the lowest since 2020, according to Bloomberg calculations based on data from the China Central Depository & Clearing Co. and Shanghai Clearing House. That’s also the biggest outflow since May.