After PBOC signaled more easing, China bond yields reached a new record low.

After PBOC signaled more easing, China bond yields reached a new record low.
After PBOC signaled more easing, China bond yields reached a new record low.
  • The reserve requirement ratio was reduced by the People's Bank of China on Tuesday, resulting in a record low for China bond yields.

The reserve requirement ratio for banks was reduced by the People's Bank of China on Tuesday, resulting in a record low for China bond yields.

The yield on China's 10-year government bonds decreased by 3.75 basis points to 2.043%, according to LSEG data, reaching a new record low. Additionally, the yield on 30-year bonds fell to a record low of 2.168%.

PBOC Governor Pan Gongsheng declared at a press conference that China will decrease the reserve requirement ratio by 50 basis points.

The yuan weakened to 7.06 against the dollar, according to LSEG data from China.

An unusual high-level press conference was held after the U.S. Federal Reserve cut interest rates last week, potentially paving the way for China's central bank to lower rates even further and stimulate growth amid deflationary pressures.

The bond market in China has attracted insurance companies and institutional investors due to limited investment opportunities in other sectors, such as real estate and the stock market.

The PBOC maintained its main benchmark lending rates at their current levels during the monthly fixing, while Pan suggested a possible reduction in the loan prime rate ranging from 0.2% to 0.25%.

This is breaking news. Please check back for more.

by Lee Ying Shan

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