BEIJING—The People’s Bank of China announced Wednesday that it held its first joint working group meeting with the Ministry of Finance to discuss government bond trading in open market operations.
According to a statement from the People’s Bank of China, authorities from both countries established a joint working group operating mechanism and exchanged views on the development of the country’s bond market at the meeting.
According to the meeting, buying and selling government bonds in open market operations is an important tool for the central bank to enrich its monetary policy toolbox and strengthen liquidity management.
The two authorities will coordinate development and security, strengthen policy synergies, maintain stable development of the bond market, and provide a healthy environment for the central bank’s government bond trading in open market operations.
The People’s Bank of China conducted open market government bond transactions in August and September, resulting in net purchases of government bonds with face value of 100 billion yuan ($14.17 billion) and 200 billion yuan, respectively.
Analysts interpreted the central bank’s net purchases of bonds as a clear signal of stepped-up monetary policy efforts to support stable economic growth and boost domestic demand.
Pan Gongsheng, the president of the People’s Bank of China, said in a press conference on September 24 that the central bank has incorporated government bond trading into its monetary policy toolbox. He also said the bank was working with the Ministry of Finance to consider improving the pace of bond issuance, maturity structure and custody system.
