Reported about 4 hours ago
China's local governments are rapidly issuing bonds to refinance hidden debts, intensifying liquidity issues in the financial system. In the first two months of 2025, regional authorities plan to sell 1.69 trillion yuan ($233 billion) in bonds, with approximately half intended to replace off-balance sheet debts. This surge in bond offerings is causing cash shortages as banks strive to absorb these securities, while money-market rates have escalated amid a tight liquidity environment. The refinancing efforts, initiated after a recent approval for debt swaps, pose challenges for banks in managing liquidity during a period of rising costs.
Source: YAHOO