China's central bank to resume treasury bond purchase after pause earlier this year

Pan Gongsheng, governor of the People’s Bank of China. (Photo/Screenshot)

(ECNS) - The People’s Bank of China (PBOC) , the country’s central bank, will restart its treasury bond purchases in the open market, said PBOC governor Pan Gongsheng at the Annual Conference of Financial Street Forum 2025 in Beijing on Monday.

The move is expected to enrich China's monetary policy toolkit and enhance the financial functions of government bonds, according to Pan.

The PBOC paused its treasury bond trading earlier this year due to “significant pressure” from supply-demand imbalances in the bond market and increasing market risks, Pan said.

Liao Bo, macro co-chief analyst at Zheshang Securities, told media that the “core purpose” of the central bank’s trading of government bonds is to “regulate liquidity”, adding that it does not indicate the “stance” of China’s monetary policy.

The resumption will inject “long-term liquidity” into the banking system, prompting financial institutions to “increase credit lending,” said Dong Ximiao, chief researcher at Zhaolian Finance.

（By Zhang Jiahao）