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China's Central Bank Halts Bond Purchases Amid Deflation Concerns

share-iconFriday, January 10 comment-icon3 weeks ago 7 views
News sources:
nytimesNYTIMES
China's Central Bank Halts Bond Purchases Amid Deflation Concerns

Credited from: NYTIMES

  • China's central bank announced a temporary halt to purchasing government bonds, reflecting the economy's sluggish conditions.
  • The move aims to counteract an investor trend favoring bonds over riskier assets like stocks.
  • This action is noteworthy as most global interest rates are rising amid inflation fears, contrasting with China's low inflation concerns.
  • Public confidence has waned due to falling housing prices and stock market declines, leading families to deposit money in state banks.
  • By ceasing bond purchases, the central bank aims to reduce bond demand, which may help stabilize interest rates.

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