Despite market worries about quantitative easing, China’s central bank appears to be getting ready to make its first purchase of treasury bonds in the secondary market in more than 20 years after state media on Wednesday stepped up suggestions of better coordination by the finance ministry and the People’s Bank of China.
In order to raise money for development, more government debt is scheduled to be issued in the upcoming months, as revealed by the two government agencies late last month.
The Securities Times, a financial publication published by the People’s Daily, stated on its front page that “since it is now certain that the central bank will participate in treasury-bond trading, the coordination of treasury-bond issuance pace and monetary policy operations will become challenging in aligning fiscal and monetary policy.”
This is the first in a planned series of pieces in the newspaper discussing the specific areas of cooperation between the Ministry of Finance and the PBOC, as well as the process for doing so.