Xia Bin: Foreign geometry of the Bank of China ’s trading of national bonds?

Source: China News Agency

Author: Xia Bin

In August, the Bank of China launched an open market for national bonds, and the face value of bonds on a net monthly purchase of bonds was 100 billion yuan (S $ 18.4 billion).What impact will the first buy and sell national bonds in the history of the People's Bank of China?

For the bond market, this move is conducive to maintaining financial stability.The market view believes that the central bank's recent voices on buying and selling national bonds and long -term national bond yields aims to guide the return of long -term national bond yields to return to a reasonable range, and remind investors that the investment risks that may face.

Zhang Jun, chief economist of China Galaxy Securities, said that when buying short -term Treasury bonds is to invest in basic currencies, and long -term national debt is intended to block possible long debt bubbles and maintain financial stability."Buying short and selling long" helps maintain the normal upward shape of the yield curve.

Wen Bin, chief economist of China Minsheng Bank, told a reporter from China News Agency that the operation of "buying short and selling long" reflects the central bank's regulation of the government's debt yield curve and the risk management attitude towards long -term interest rates.To maintain a long -term spread and long -term interest rate level with reasonable national bond interest rates, to avoid over -speculation and potential financial risks accumulation.

"At present, the possibility of long -term bond market interest rates has a lower possibility of breaking down significantly. Short -end products may be favored due to their good liquidity and the configuration needs of non -silver institutions." Wen Bin said.

For monetary policy, the toolbox is further enriched."The central bank's launch of government bonds trading marks the new monetary policy tools 'entry'." Zhou Maohua, a macro researcher of the Financial Market Department of Everbright Bank, said that the market has long expectations for central bank trading government bonds.The central bank stated in the second quarter monetary policy implementation report that it is planned to introduce government bonds in the open market operation to enrich the basic currency issuance methods.

Zhou Maohua said that the central bank's establishment of government bond trading instruments, conforming to the changes in liquidity market structure, enriching monetary policy tools, and improving the accuracy and effectiveness of the central bank's basic currency and market liquidity regulation.

"China's monetary policy still has normal operating space. The central bank's trading of government bonds is a rich policy toolbox and increased the basic currency method." Zhang Jun believes that the central bank is more flexible when the national debt trading operation in the open market is more flexible, and the time limit for coverage is moreFor extensive, it can be used as an effective supplement to other basic currency methods.

For macro -control, policy coordination and cooperation show new ideas.Pan Gongsheng, President of the People's Bank of China, mentioned at the Lujiazui Forum held in June this year that the central bank is strengthening communication with the Ministry of Finance to jointly study and promote the implementation of government bonds in the open market operation of the central bank.This process is progressive as a whole. The pace of government bond issuance, the term structure, and the custody system also need to be simultaneous research and optimization.

Zhang Jun said that the central bank's buying and selling government bonds is a coordination point for currencies and the Financies.The central bank's buying and selling government bonds can iron the mobility impact of the centralized issuance of government bonds to avoid violent fluctuations in funds.

The Institute of Finance of the Chinese Academy of Social Sciences also suggested in the report before that, in the context of the current challenges such as lack of effective demand in China, it should appropriately increase the debt limit according to economic operation.That is, the fiscal is more.

Zhang Jun believes that with the Federal Reserve or interest rate cuts in September, external pressure is relieved, and an important observation time node that issues fiscal fiscal tools in that month or next month or next month.At that time, the central bank may increase the operation and sell national bond operations and coordinate.