China's c.bank hints it may add treasury bond trades to policy toolkit

However, factors such as supply and demand will also bring short-term disturbance to long-term treasury bond yields," the official was quoted as saying. In the future, treasury bond issuance is expected to quicken, and long-term bond yields will rebound, the official added.

A senior Chinese central bank official suggested on Tuesday that the bank's buying and selling of treasury bonds in the secondary market could be used for liquidity management and as a monetary policy tool.

"The central bank's trading of treasury bond in the secondary market can be used as a liquidity management method and a reserve of monetary policy tools," the Financial News - a publication backed by the People's Bank of China - quoted the unnamed official as saying. China's treasury bond market has become the third-largest in the world, and its liquidity has improved, making it possible for the central bank to carry out bond buying and selling on the secondary market, the official was quoted as saying.

China's long-term treasury bond yields, which have fallen recently, will move "within a reasonable range" in line with expected economic growth, the official said, adding that China's economic recovery is consolidating. "The central bank is optimistic about the prospects for economic growth in the long term. However, factors such as supply and demand will also bring short-term disturbance to long-term treasury bond yields," the official was quoted as saying.

In the future, treasury bond issuance is expected to quicken, and long-term bond yields will rebound, the official added.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)