SHANGHAI (Reuters) – China’s market interest rates are unlikely to rise rapidly in the short term despite the recent sharp rise in U.S. bond yields, said the state-run China Securities Journal Thursday.
Chinese bonds have been “desensitized” compared to the U.S., as economic cycles in the world’s two largest economies declined, a statement released in state media said, adding that domestic rates have also already risen in price as a result of macroeconomic policy changes.
The newspaper said another rise in market rates in China was hampered as two key policy levels – interest rates in open market activity and a medium-term loan facility (MLF) – stable with no signals. that they would be pushed up in the short term.
Expectations for inflation and the broader economy were stable while supply and demand in the bonds market was balanced in the first quarter of this year, he said.
“Macro conditions at home and abroad have generally been improving, and (we should) pay close attention to price movements,” the newspaper said.
“At the same time, government bonds may accelerate in the second quarter, causing increasing supply pressures, so the upward movement of market interest rates has not yet come to an end.”
Yields on U.S. Treasury 10-year benchmark bonds have gone up about 60 basis points so far this year, compared to an increase of 10 basis points for Chinese 10-year government bonds in the same period, which leading to a decline in premium production.
Earlier this week, Guo Shuqing, head of China’s Banking and Insurance Regulatory Commission, said China was exploring ways to regulate capital inflows to prevent disruption in the domestic market as authorities “Very concerned” about the risk of bubbles bursting in foreign markets. .
Reciting with Winni Zhou and Andrew Galbraith; Edited by Shri Navaratnam