China’s loan collateral tweak will ease ‘asset famine’

Yesterday the People’s Bank of China lowered the collateral requirement for medium-term
loans:

• ForexLive Asia-Pacific FX news wrap: A series of easings from the People’s Bank of China

The People’s Bank of China (PBOC) said it would
lower the collateral requirement for the medium-term lending
facility (MLF) loan to increase the size of tradable bonds in
the market.
The move comes in the context of a record-long rally in China’s sovereign
bond markets that has prompted repeated central bank warnings
and measures to put a floor under falling yields and prevent a
market bubble.

Chinese state media are talking it up today, saying it’ll alleviate the “asset famine” pressure on the bond
market.

Info via Reuters

This article was written by Eamonn Sheridan at www.forexlive.com.