China Bond Inflow Extends on Lucrative Swaps, PBOC Easing Hope
- Global investors raised holdings of yuan debt for fourth month
- Attractive FX swap premium key to demand for local bonds
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Global investors raised their holdings of Chinese bonds for a fourth straight month, capitalizing on a lucrative currency swap strategy to continue their gradual return to the world’s second-biggest debt market.
They bought 181 billion yuan ($25 billion) of local yuan bonds on a net basis in the country’s main interbank market in December, taking their total holdings to the highest since April 2022, show Bloomberg calculations based on clearing house data.