China’s central bank halts bond buying, possibly with eye on yuan

By Free Republic | Created at 2025-01-10 07:45:57 | Updated at 2025-01-10 11:54:35 4 hours ago

China’s central bank halts bond buying, possibly with eye on yuan
CBNC ^ | 01/09/2025

Posted on 01/09/2025 11:16:47 PM PST by BenLurkin

China’s central bank said on Friday it has suspended treasury bond purchases, triggering a jump in yields and spurring speculation that the move was aimed at defending a falling currency.

The People’s Bank of China cited a shortage of bonds in the market as the reason it was halting the purchases, which were part of its operations to ease monetary settings.

But the move coincides with a brutal selloff in other major bond markets around the world and suggests China’s central bank is trying to ensure yields at home also rise in tandem, analysts say.

Yields, which move inversely to bond prices, jumped following the central bank’s announcement.

China’s 30-year treasury yield climbed five basis points in early trade while the 10-year yield rose four basis points. Both hit record lows recently. The yuan too rose slightly.

“One of the key reasons for the depreciation of the yuan is the widened yield gap between China and the U.S., so the central bank is sending a signal to the market that the yield rate is unlikely to fall further,” Ken Cheung, chief Asian FX strategist at Mizuho Bank.

(Excerpt) Read more at cnbc.com ...

TOPICS: Business/Economy
KEYWORDS: pboc

Click here: to donate by Credit Card

Or here: to donate by PayPal

Or by mail to: Free Republic, LLC - PO Box 9771 - Fresno, CA 93794

Thank you very much and God bless you.

1 posted on 01/09/2025 11:16:47 PM PST by BenLurkin

To: BenLurkin

China is screwed, because their population may be as low as 800 million by those who have knowledge.

2 posted on 01/09/2025 11:39:03 PM PST by Jonty30 (Liberals are a fulfillment of II Tim3:5. We are instructed to have nothing to do with those people. )

To: Jonty30

I have heard the same thing.

3 posted on 01/09/2025 11:41:07 PM PST by LukeL

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Read Entire Article