China's 10-year government bond yield fell to 1.73% on Wednesday, marking a new one-week low as investors weighed signals that the People's Bank of China (PBOC) may adjust its monetary policy framework. Speaking at the Lujiazui Forum, PBOC Governor Pan Gongsheng said the central bank would refine its management of short-term interest rates and expand overnight reverse repo operations at an appropriate time. His comments bolstered expectations that the PBOC could gradually move away from using the seven-day reverse repo rate as its primary policy anchor, bringing its operating framework more in line with major global central banks and strengthening its grip on short-term funding conditions.
At the same forum, Chinese Vice Premier He Lifeng said Beijing plans to embed anti-sanctions provisions into its financial legislation, in a bid to enhance the country’s capacity to respond to what he characterized as “unreasonable” external restrictions.
