Monday, June 25, 2007

China Reserves Plan to Worsen Five-Month Bond Slump, Shenyin Wanguo Says

(Bloomberg) -- China's bonds may extend a five-
month slide as a government fund sells about 1.5 trillion yuan
($200 billion) of debt to buy some of the nation's foreign
exchange reserves, Shenyin Wanguo Securities Co. said.

China is setting up the State Investment Co. that will
purchase a portion of the country's $1.2 trillion foreign-
exchange reserves from the central bank to seek higher returns
in global markets. The government said this month lawmakers will
review plans for a ``special bond sale'' to fund the acquisition.


Read more at Bloomberg Emerging Markets News

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