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BIZCHINA / News
China to issue 600b yuan special T-bonds
By Shangguan Zhoudong (Chinadaily.com.cn)
Updated: 2007-08-15 09:31
China is planning to issue an initial tranche of 600 billion yuan in
special treasury bonds, the China Business News reported today.
The expected issuance is part of 1.55 trillion yuan in special T-bonds
sought to finance a new investment company that will help diversify the
country's huge foreign exchange holdings.
The bonds are to be issued in three tranches, with the second and third
tranches totaling 600 billion and 350 billion yuan respectively.
The bonds will be issued to the People's Bank of China, the central bank,
through an asset swap, which will increase the central bank's T-bonds
holdings.
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According to the report, the Agricultural Bank of China is likely to act
as a middleman in channeling the bonds from the Ministry of Finance to
the central bank.
The new investment company will formally open for business by the end of
September.
Insiders said that it's uncertain whether certain senior officials will
join the investment company. Candidates include Gao Xiqing, vice chairman
of the National Council for Social Security Funds, Zhang Hongli, vice
finance minister, and Su Ning, deputy central bank governor, who are
members of the preparatory team.
Officials from the Ministry of Finance said that the bond issuance won't
impact the money supply whether issued in whole or in tranches.
The central bank will use the special bonds to gradually absorb liquidity
through open market operations.
The Standing Committee of the National People's Congress, China's top
legislature, approved the massive sale of special T-bonds at the end of
June this year.
(For more biz stories, please visit Industry Updates)
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