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our reporter liu qi

on august 30, the people's bank of china (hereinafter referred to as the "pboc") issued its first announcement in the newly opened "open market treasury bond trading business announcement" column on its website - treasury bond trading business announcement [2024] no. 1.

the announcement shows that in order to implement the relevant requirements of the central financial work conference, the people's bank of china carried out open market treasury bond trading operations in august 2024, buying short-term treasury bonds and selling long-term treasury bonds from some primary dealers in open market operations. the net face value of bonds purchased for the whole month was 100 billion yuan.

regarding the central bank's treasury bond trading operations, pan gongsheng, governor of the central bank, said at the 2024 lujiazui forum held in june that incorporating treasury bond trading into the monetary policy toolbox does not mean quantitative easing, but rather positioning it as a channel for base money injection and a liquidity management tool, involving both buying and selling, and combined with other tools to create a suitable liquidity environment.

mingming, chief economist of citic securities, said in an interview with the securities daily that the implementation of the purchase and sale of treasury bonds is a measure to implement the requirements of the central financial work conference, which is conducive to strengthening the coordination of monetary and fiscal policies and further enriching the monetary policy toolbox. at the same time, it is also conducive to stabilizing the operation of the financial market and supporting the growth of the real economy.

"buying short-term government bonds and selling long-term government bonds will help stabilize the operation of the financial market and prevent financial risks," mingming added.

the central bank pointed out in the "china monetary policy implementation report 2024" recently released that since the beginning of this year, the yield of treasury bonds has continued to decline rapidly. in late june, the yield of 10-year treasury bonds approached the 2.2% mark, a 20-year low, and has obviously deviated from the reasonable central level, accumulating financial risks. on july 1, the people's bank of china issued an announcement announcing the launch of treasury bond borrowing operations, and when necessary, it will choose to sell in the open market to balance the supply and demand of the bond market and correct and block the accumulation of financial market risks.

zhou maohua, a researcher at the financial markets department of china everbright bank, told the securities daily reporter that the central bank can stabilize market expectations and prevent irrational unilateral volatility risks in the treasury bond market through treasury bond trading operations. at the same time, it can maintain a normal upward-sloping yield curve, promote reasonable pricing of financial assets, and effective allocation of resources.