China's Ministry of Finance (MOF) auctioned 26 billion yuan of 30-year fixed-rate Treasury bonds at relatively low annual yield of 3.74 percent Monday.
As analysts reasoned, the optimistic outcome was driven by active subscriptions for the product, producing a 1.88 bid to cover ratio at auction. Currently, demands on China's primary bond market are generally encouraging after September macro economic data turned out disappointing and interbank liquidity flows got looser.
In future, it was still necessary for the Chinese central bank to continue to guide down money market rates as the present borrowing costs were much higher than the level in 2008 while residents' incomes and inflation grew slower, according to China International Capital Corporation.
An MOF announcement said that this batch of T-bonds would be available for secondary market trading on October 26 and buyers would be paid twice a year until maturity.
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