Chinese local governments rushed to the debt market to make funds intensifying funds

China is increasing the tightness of the currency market funds. Because the local government has increased the scale of bond issuance to its highest level since June last year, it is planned to raise funds for stimulus.

According to the data compiled by Bloomberg, the local government has issued 391 billion yuan (below, about 75.726 billion S $ 75.726 billion) bonds this month.The scale of debt issuance will promote the total debt issuance of this month to 512.7 billion yuan.

The liquidity indicators of the currency market show pressure.The overnight repurchase interest rate rose for six consecutive days, and the seven -day inter -bank interest rate has been rising slightly in the past month, which is the opposite of the trend of falling after the Spring Festival holiday.This prompted the Bank of China to put a 632 billion yuan to the banking system on February 17, setting a record high in a single -day net investment scale.

Pantheon Macroeeconomics LTD. chief Chinese economist Duncan Wrigley wrote in the research report: "The rising short -term interest rate may reflect the local government's debt. The local government plans to budget in the March budget case in March.The scale of debt issued before is higher than the usual level ... This is the fiscal support. "

Bloomberg reported that local governments are eager to raise funds as one of the factors that cause financial tensions.As the economy is reopening and the demand for loans has continued to increase, the bank system has already had a shortage of funds.The surge in bond issuance has further exacerbated the fluctuation of borrowing costs, which may hinder recovery.

The local government may further boost the issuance of issuance, as local governments use more special bonds for 2023 special bonds in advance.According to data based on the provincial budget compilation, the number of new local bonds in 2023 reached 2.62 trillion yuan.This amount will allow local governments to use some annual quotas before the national budget was officially approved by the National People's Congress of China in March.

Liu Yu, an analyst at Guangfa Securities, wrote in the research report: "It is expected that the 2023 local bond issuance will still maintain the front rhythm, and the batch quota is the highest in advance.. "

China Finance Minister Liu Kun wrote in an article last week that China's fiscal revenue increase this year may be mild."Scope of capital" to promote economic growth.