T-bond move seen safeguarding financial stability

The People's Bank of China, the country's central bank, may soon sell borrowed long-term Chinese government bonds, a move that would help safeguard financial stability and add a new tool of liquidity management, market experts said.

The PBOC said in an announcement on Monday that it would borrow treasury bonds in the near term from primary dealers — mainly commercial banks — to maintain the sound operation of the bond market, based on prudent assessment of the market situation.

The move, which is considered unusual for the PBOC, has attracted attention as some market analysts said this could even mark the first time for the central bank to borrow Chinese treasury bonds in open market operations.