China mulls massive Special Treasury Issuance to perk GDP – MNI
|China is expected to issue over CNY1 trillion of Special Treasury Bonds (STBs) in the third quarter to fill a fiscal gap and to help meet economic and employment targets, MNI reports, quoting policy advisors and market analysts.
The industry experts also called on the central bank to increase liquidity in order to accommodate the massive debt sale.
According to a recent report from Renmin University, the government would see a gap of about CNY2.6 trillion as fiscal income may decrease for the whole year.
To cover the extra spending, analysts predict the government may launch CNY1 trillion to CNY2 trillion of STBs in the third quarter if the State Council proposes the same.
The STBs are likely to be a necessary move if the country insists on a GDP growth target of around 5.5%, MNI notes.
Market reaction
AUD/USD fails to find any inspiration from the above headlines, as it loses 0.39% on the day at 0.6878, at the press time. Meanwhile, USD/CNY drops 0.14% to 6.6972.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.