SHANGHAI: Overseas investors resumed net purchases of Chinese government bonds (CGBs) in April following an unusual drop in March, official data showed on Monday, as the yuan currency and yield premiums over US debt rose.
Foreign holdings of CGBs stood at a record 2.096 trillion yuan ($326.14 billion) at the end of April, data from interbank market depository China Central Depository & Clearing Co (CCDC) showed, up 2.5% from the previous month.
Foreign holdings of quasi-sovereign bonds issued by China’s policy banks edged up 0.6% on the month to just over 1 trillion yuan for the first time, the data showed. Additional monthly data on foreign investment in Chinese bonds from Shanghai Clearing House — which typically accounts for more than 10% of all foreign holdings — was not yet available on Monday afternoon.
The rise in foreign investment in Chinese bonds comes a month after narrowing spreads over overseas debt and a weaker yuan saw investors trim their CGB positions for the first time in more than two years.
But in April, China’s yuan logged its longest weekly winning streak against the US dollar since September, and spreads of 10-year CGBs over their US counterpart widened by as much as 19 basis points by mid-month.
Comments
Comments are closed for this article.