China injects most cash in 2 months; 10-year yields at lowest in 18 months

The yield on China’s 10-year sovereign bonds declined to the lowest level since June 2020, as interbank borrowing costs fell after the central bank boosted short-term liquidity.

China’s 10-year government bond yield fell two basis points to 2.795 per cent as of 4:40 pm in Shanghai. On Tuesday, The People’s Bank of China boosted its injection of short-term liquidity into the financial system to 190 billion yuan ($29.8 billion), the most in two months. 

The PBOC’s operation came after an indicator for short-term borrowing costs soared the most in a year on Monday, a sign of liquidity shortages in the interbank market.