The People’s Bank of China may have bought government bonds from domestic banks in July, a rare move that has analysts puzzling over the monetary authority’s policy intentions amid a record amount of government debt issuance.
Sovereign bonds held by “other” investors — a category that includes central banks and clearing houses — rose by 196.5 billion yuan to 1.78 trillion yuan ($256 billion) last month, according to data released by China Central Depository & Clearing Co. last week.
The increase is the biggest since Bloomberg data started in late 2018, prompting analysts from Citic Securities Co. to Nomura Holdings Inc and GF Securities Co. to speculate the central bank might have bought some government debt in the month. The PBOC didn’t immediately respond to queries about the data.
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