US, China seek to ‘strengthen’ cooperation in times of financial stressFinancial Working Group met in Shanghai last week, with officials from China and the US discussing a wide range of issues over two days.Financial Working Group met in Shanghai last week, with officials from China and US discussing a wide range of issues over two days
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Editorial | Further fiscal easing is on the horizon but it will be measured
Macroscope | China’s overheated government bond market is the least of its worries
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Explainer | Why China’s risky bond rally has put PBOC on the offensiveThe 10-year government bond yield tanked to a record low as wary investors and financial institutions snatched them up at an unprecedented rate, desperate for safe-haven investments.
China’s central bank wary of bond bonanza as talk of secondary trade continuesThe People’s Bank of China remains open to taking part in the secondary bond trade, but warned of several potential risk areas it said would warrant close attention.
As bond rally takes toll, China names and shames state-backed rural banksThe central bank is seen trying to counteract forces suppressing Chinese bond yields. But in the absence of monetary tightening, a ‘short-term pause’ to the rally may be the best outcome.
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Hong Kong signs agreement with PBOC to enhance Faster Payment SystemThe Hong Kong Monetary Authority has signed an agreement with the Chinese central bank to promote cross-border linkages for fast payment systems, including a proposed increase in the remittance cap.
Rate cuts and bond support as China moves ‘on a path to easing’China cuts one-year medium-term lending facility and allocates 300 billion yuan (US$41.3 billion) in ultra-long-term treasury bonds on Thursday.
‘Heavy lifting’ still needed even as China cuts key rates after third plenumPeople’s Bank of China lowered the seven-day reverse repo rate, as well as both the one-year and five-year loan prime rates, just days after the conclusion of the third plenum.
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Chinese central bank’s move to cool bond rally may fall flat, analysts sayThe PBOC’s efforts to defend declining bond yields will have little long-term impact, as investors are still pessimistic about the country’s economic recovery, analysts say.
China’s central bank takes extra control of interest rates amid reform pushAnalysts believe moves by the People’s Bank of China to conduct additional open market operations paves the way for a new and narrower interest rate corridor.
With US Fed rates staying in stratosphere, the pressure’s on for China’s yuanThe Bank for International Settlements has praised China and other developing economies in managing their monetary policy, but cautioned pressure will remain high as US Fed rates remain unchanged.
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China’s attempt to rein in bond rally will only slow it temporarily: analysts‘Even with intervention, changing the incentive for investors seeking stable yield could prove challenging,’ Natixis analyst says.
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As bond yields drop, China’s central bank could step into secondary marketChina's central bank, concerned about a decline in long-term bond yields, will borrow treasury bonds from primary market traders to maintain liquidity in the market.
Hong Kong to enhance cross-border transfers to support retireesHong Kong’s monetary authority plans to sign an agreement with the Chinese central bank to find ways to enhance cross-border remittance services to make it easier for Hongkongers who work or retire on the mainland.
Chinese bond yields at 2-decade low as shaky economy curbs risk appetiteA powerful rally in China’s government bonds that has pushed yields to a two-decade low shows no signs of easing amid persistent worries about the outlook for growth. A sluggish stock market and a long-running property downturn continue to dampen risk appetite.
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The View | How China’s slowdown is shaking up Asia’s economic calculusChina’s struggles are injecting uncertainty into its neighbours and forcing reassessments when the geopolitical scene is already strained.
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Monetary, fiscal policy coordination urged as China’s treasury-bond trade nearsConditions are ripe for China’s central bank to trade bonds in the secondary markets, but it will be a gradual process, according to a former People’s Bank of China official.
Macroscope | Why China must choose stealth yuan depreciation and avoid mistakes of 2015The yuan is under strain from internal and external pressures, making the balancing act that China’s monetary policymakers are trying to manage even trickier.
Explainer | 13 of China’s biggest fiscal manoeuvres to boost economy since pandemic yearsThe People’s Bank of China keeps a running tab of big policy moves, and it shows that trillions of yuan worth of support measures have been rolled out since 2021.
China must ‘liberate’ mind with primary market bond purchases by central bankChina’s central bank is set to participate in treasury-bond trading in the secondary market, and a prominent researcher affiliated with the Ministry of Finance says purchases in the primary market should also be made.
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China’s property stimulus plan needs more time, money and policy supportThe mainland has US$3.9 trillion worth of unsold properties, which makes Beijing’s funding plan account for less than 2 per cent of that excess inventory, a Barclays report said.
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Hong Kong opens e-CNY pilot programme to whole city, no mainland account neededRoll-out provides a safe, convenient means of payment for Hongkongers spending in mainland China and mainland users in Hong Kong, HKMA says.
‘Hard to be employed’: jobs, consumption rates still weighing on Chinese economyMore than 46 per cent of urban residents polled by People’s Bank of China say job market is ‘uncertain’, while 62 per cent aim to save more, in continued challenge for policymakers counting on domestic consumption to propel the economy.
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In Asia, US dollar’s growing strength fuels concern over currency stabilityAnalysts say China’s central bank, with an eye on the yuan’s stability, could let it weaken gradually, but such a move ‘could backfire to some degree’.
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Gold ‘the only safe asset’ as China’s consumers continue to seek securityGold purchases in China rose by 5.9 per cent in the first quarter compared with the same period in 2023, as consumers seek security in ‘the only safe asset’, analysts said.
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Official of China’s securities watchdog investigated for ‘serious violation’Investigation into Yao Qian, who serves as the director of the department of technology supervision at the China Securities Regulatory Commission, comes amid an uptick in market reforms.
Opinion | Biggest risk with falling yen is not what Japan does but how China reactsNothing would stabilise China’s economy faster than a weaker yuan. But this risks triggering a currency war across Asia and beyond, and setting back China. Let’s hope Xi resists the urge.
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People’s Bank of China (PBOC)
The People’s Bank of China (PBOC) is the central bank of mainland China. It is responsible for carrying out monetary policy and regulation of financial institutions, including setting interest rates.
last updated:
21 August, 2024
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