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Special bonds have no grave impact on financial marketBy Shangguan Zhoudong (chinadaily.com.cn)Updated: 2007-07-05 11:01 An official from the Ministry of Finance said yesterday the issuance of 1.55 trillion yuan (US$204.1 billion) in special treasury bonds won't seriously impact the nation's financial market, Xinhuanet reported today. The official said the issuance of the special bonds has no direct impact on the money supply whether it will be issued whole or by tranches.
The official also said the bonds would not be issued directly to the People's Bank of China, the central bank. But Li Yang, a researcher of the Chinese Academy of Social Sciences, said that the offer will lead to an increase in the amount of bonds held by the central bank via asset swapping. The central bank can use the special bonds to gradually absorb liquidity through open market operations, according to the official. According to the ministry, foreign exchanges bought by the special bonds will
not be calculated in China's forex reserves. (For more biz stories, please visit Industry Updates) |
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