Chinese banks are supposed to be willing to and capable of digesting the future local government bond issues, says a report of China International Capital Corp (CICC). CICC forecast that despite the local government bonds supply peak in the second and third quarter, the country's constant monetary policy loosening and low MM rates would be good for banks to buy local government bonds. Under such circumstances, short- and mid-term bond yields are very likely to step down while long-term bond yields will go down ultimately.
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