PBoC says its bills are better tools than bonds for China

Central bank bills will play a bigger role in stabilising yuan exchange rates, suggests PBoC research note

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Central bank bills are better monetary policy tools than government debt obligations for China, a research team of the Chinese central bank says in a research note.

“If China followed the example of developed markets, which suggests absorbing excess liquidity by selling government bonds, it would have little impact, given that Chinese government bonds only represent a small part of the central bank’s balance sheet,” writes the People’s Bank of China’s monetary policy research team.

The note is

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