Central Banks
PBOC Studies Plan to Narrow Rate Corridor, Warns Over Bond Risks
- China’s central bank is expanding its toolkit to guide markets
- Policymakers caution over high rate risk in bond investments
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China’s central bank said it’s studying a plan to narrow the range within which short-term interest rates can fluctuate, extending an overhaul of its policy toolkit that aims to guide the market more effectively.
The People’s Bank of China is considering how to “reasonably” narrow the corridor, according to a quarterly monetary policy report published Friday. A tighter band would help the PBOC steer market rates so they fluctuate around a level it targets.