The People’s Bank of China did not seek to nor will it seek to ban legitimate investments or trading in its government bonds, but it sees risks in a buying spree of the securities, according to people familiar with the matter.
The PBOC gave risk warnings to some small- and medium-sized financial institutions which had significantly boosted holdings of long-dated bonds within a short time, according to people familiar familiar with the central bank’s thinking. Any rumor of the PBOC banning sovereign debt trading was a misinterpretation and is something the central bank will not do, they said.
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