The People’s Bank of China, China’s central bank, said Wednesday it will issue 15 billion yuan (2.2 billion U.S. dollars) of 3-year bank bills Thursday, another sign the government wants to tighten liquidity.
( n) I1 i9 g* u) g. o The central bank stopped issuing 3-year bills in June 2008 to reverse the economic slowdown.
7 V( H1 ^# X5 A "The resumption of the issuance of 3-year bills is the latest signal of liquidity tightening," said Liu Yuhui, an economist with the Chinese Academy of Social Sciences.
* g. w$ s- j" F4 D/ g, U6 C# ~1 K Experts said the resumption of 3-year bill issuance also relates to the country’s recent strong economic data.
) ]! V. Q+ N; z China’s Purchasing Managers’ Index (PMI) for manufacturing sectors, which is designed to provide a real-time snapshot of business conditions, rose to 55.1 percent in March, the 13th straight month the index has been above 50 percent.
$ Y+ q, r5 L! Q5 `4 F) } A PMI reading above 50 percent suggests economic expansion, while one below 50 percent indicates contraction.& E6 ?( v+ S6 o8 g, l
"The resumption in 3-year bill issuance shows the central bank has grown more confident about the economic recovery and is paying more attention to inflation," said He Yifeng, a researcher with the China Institute for Development and Reform at the Central University of Finance and Economics.外语学习网4 W7 S6 ^5 g% M& q9 l
"It will help curb credit excesses and ease the pressures for asset price inflation," He said.
/ o/ a! e- \! _7 j0 [ He also added the resumption does not rule out the possibility of further rises in deposit reserve ratios, even though the issuance of 3-year bills is an effective tool in curbing liquidity.
" q: H4 A6 f$ X6 E$ q- k To ease inflationary pressures, the government ordered banks to increase their reserve ratios to 16.5 percent in February, the third such rise since December last year. |