National Foreign Exchange Administration photo: VCG
Interbank bonds held by foreign institutions fell to 3.77 trillion yuan ($560 billion) at the end of April from 3.88 trillion yuan in March as differing monetary policies between China and the United States put pressure on investors. short term on assets denominated in yuan. But the long-term attractiveness of China’s bond market remains intact, national news portal thepaper.cn reported Thursday, citing experts.
Foreign holdings of China’s interbank bonds, made up of government bonds and political financial bonds, have fallen for three consecutive months since February.
The readings for late January, late February and late March were 4.070 billion yuan, 3.990 billion yuan and 3.880 billion yuan respectively.
At the end of April, interbank bonds held by 1,035 foreign institutions accounted for about 3.2 percent of China’s total interbank bond market.
Analysts pointed to the decline in foreign investors’ holdings of Chinese bonds as a result of divergent currency stances taken by China and the United States, the narrowing of the bond yield spread in the two countries and pressure from the revaluation of Chinese assets.
However, analysts at the Bank of China (Hong Kong) noted that for long-term investors rather than speculators, yuan-denominated assets will alternate between risky and heavenly assets, and the medium-term impact and long term of these factors is controllable.
Chinese bonds have relatively high value for investors compared to others globally, Wang Chunying, spokesperson and deputy head of the State Administration of Foreign Exchange (SAFE), said on April 22. .
In the long term, the Chinese financial market will continue to open up and global investors will still need Chinese assets. The tendency of foreign investors to invest in China’s long-term bond market will not change, Wang noted, adding that the yield gap is not the only factor or even the dominant factor affecting foreign investment in foreign countries. Chinese bonds.