5 billion people’s national debt debut on Thursday
The Ministry of Finance announced that with the approval of the State Council, 15 billion yuan (the same as the next) of the national debt will be issued in Hong Kong this year, of which 5 billion yuan will be tendered on Thursday (June 20). The specific issuance arrangements will be announced in the Hong Kong Monetary Authority’s Debt Instrument Central Clearing System (CMU).
The size of the renminbi government bonds issued by the Ministry of Finance in Hong Kong this year was 15 billion yuan, up from 10 billion yuan last year. However, the announcement did not mention the issuance of US dollar sovereign debt. Last year, it issued a $3 billion sovereign debt in Hong Kong.
Overseas Chinese Yongheng: Debt interest attracts demand
Li Ruofan, an economist at Huaqiao Yongheng Bank, expects that the Treasury’s issuance of treasury bonds will have certain demand, because the current trend of global debt decline continues, compared with the sovereign interest rate of the Eurozone, which has fallen to the negative interest rate level. Still attractive, such as 10-year RMB government bond debts up to 3.2%, can attract market subscription.
Li Ruofan continued that although the renminbi has depreciated pressure, the market does not expect the RMB exchange rate to fall sharply, and the risk of default is extremely low. Investors still regard RMB treasury bonds as safe assets.
She pointed out that in May, the “bond bond” went north to invest in the onshore renminbi bond market, recording a transaction volume of more than 158 billion yuan, the highest since its opening, reflecting that foreign interest in holding renminbi bonds remains high.
In addition, in response to the inclusion of Chinese bonds in the Bloomberg Barclays Global Composite Index, it will also attract institutions to invest in RMB government bonds.