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BIZCHINA / Center
China to issue 200b yuan special T-bonds
(Xinhua)
Updated: 2007-09-11 08:48
China is to issue 200 billion yuan (US$26.7 billion) of special treasury
bonds as the second tranche of a planned 1.55 trillion yuan basket to
finance the country's new foreign exchange investment firm.
The bonds would be sold to the public, with outstanding terms of more
than 10 years, the Ministry of Finance announced on Monday.
The first 100 billion yuan bonds will be issued later this month in three
batches, while sale of the second half is scheduled for the fourth
quarter.
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The announcement came two weeks after the ministry issued 600 billion
yuan of such bonds targeting the country's commercial banks with an
annual interest rate of 4.3 percent.
"The bond sale will help ease liquidity, prevent the economy from
overheating and strengthen the macro-control policy," the ministry said.
"Theoretically, a 200-billion-yuan bond sale to the public could have the
same effect on excess liquidity as an 0.5-percentage-point hike in bank
reserve requirements," said Wang Guogang, a finance expert at the Chinese
Academy of Social Sciences.
Issuing in batches and to different buyers would ensure the stability of
the financial market and reduce the bond investment risks, Wang said.
In June, China's top legislature approved the issuance of 1.55 trillion
yuan of special treasury bonds by the Ministry of Finance to buy US$200
billion?forex reserve for a state investment firm, which will make better
use of the country's huge forex reserves.
China's forex reserves had reached US$1.33 trillion?by the end of June.
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