China bill sales will boost yuan by expanding investment options in Hong Kong
2018-10-01 08:45:46 source：The South China Morning Post
September 30, 2018
China’s decision to sell short-term yuan-denominated securities in Hong Kong may pave the way for a regular programme, analysts say, that would create a separate “offshore” monetary policy allowing the central bank to better manage yuan liquidity outside the mainland.
Sales of short-term bills through the People’s Bank of China’s (PBOC) regular open-market operations have long been a key liquidity management tool to absorb excessive cash from mainland banks when the central bank wanted to curb inflation or an overheating economy.
In the same vein, the PBOC has the flexibility to redeem its bills on maturity instead of rolling them over, resulting in a money injection back into China’s financial system to boost economic growth.
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