People’s Bank of China HK bills issue oversubscribed

Business | 7 Nov 2018 6:47 pm

The People’s Bank of China sold 20 billion yuan of bills in its first issuance in Hong Kong today, a move that could reduce the offshore yuan’s liquidity and support the Chinese currency.

The PBOC sold 10 billion yuan of three-month bills at 3.79 percent, according to a statement on the central bank’s website. It issued 10 billion yuan of one-year notes at 4.2 percent, versus 2.77 percent yield on Chinese government bonds of the same tenor traded in the onshore market, Bloomberg reports.

Both tenors are over-subscribed, with 42.6 billion yuan of orders being placed for the three-month notes and 32.9 billion yuan put in for the one-year bills, according to a statement from the Hong Kong Monetary Authority.

PBOC bill issuance can improve the yield curve in the offshore market, providing benchmark for other yuan products, according to Hong Kong Monetary Authority Chief Executive Norman Chan.

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