PBoC continues efforts to cool bond market rally

Bond borrowing: The PBoC in Beijing. The central bank has been pushing back against China’s bond rally for months to move yields higher, while investors have debated how this strategy would work in practice. — Bloomberg

BEIJING: The People’s Bank of China (PBoC) has tapped two of the country’s biggest banks for its plan to borrow government bonds, a potential step toward cooling a market rally, according to sources.

The PBoC signed an agreement with Industrial & Commercial Bank of China Ltd and is in talks with Postal Savings Bank of China Co to borrow bonds, the sources said.