Reported 6 months ago
The People's Bank of China (PBOC) is considering using buying and selling government bonds as a policy tool, leading to discussions on how this might actually materialize in the market. Speculations arise as to whether the PBOC will sell bonds first to control interest rates before engaging in large bond purchases, as a means to address concerns regarding an overheated bond market. Challenges include the limited supply of bonds the PBOC can sell due to the maturities it targets, prompting strategies for acquiring and managing bonds to utilize in the market. Overall, the bond-trading approach is seen as an additional liquidity management tool for the PBOC, with opinions varying on when and how it will be implemented.
Source: YAHOO