Bond prices on China's interbank bond market are likely to increase Monday after the country's interest rate cut. China's central bank on Sunday announced an interest rates cut starting May 11, the third time since November last year, to bolster the real economy. The People's Bank of China (PBOC) will cut the benchmark deposit and loan interest rates by 25 basis points (bps).
After the cut, the one-year deposit rate will stand at 2.25 percent, and the one-year lending rate at 5.1 percent. Traders noted that the interest rate cut might further fuel up bond buyer's confidence and keep liquidity environment stable. On last Friday, ChinaBond New Composite Total Return Index, a broadly-based market sentiment indicator, added 0.1399 percent to close at 160.8415 points.
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