China Policy Banks Pay Back PBOC at a Record Pace, Turn to Bonds
- Policy banks sold the most bonds in two decades, analyst says
- Bond market rally has posed challenges for the central bank
Officials have ramped up scrutiny of trading behavior, and warned some banks to limit their exposure to bonds amid financial-stability worries.
Source: Bloomberg
As the Chinese bond market undergoes a powerful rally, the nation’s so-called policy banks are turning away from the People’s Bank of China as a source of funding and rushing to raise debt instead.
China Development Bank and its two fellow policy-oriented lenders repaid a net 343 billion yuan ($48 billion) of funds under the People’s Bank of China’s Pledged Supplemental Lending program in April. That’s the largest repayment since data began in 2015, the latest official figures showed.