Understanding Chinese Bond Yields and their Role in Monetary Policy

Information about Asia and the Pacific Asia y el Pacífico

Journal Issue

Volume/Issue:: 2011/225
Series:: IMF Working Papers
Author(s):: Nathan Porter, and Nuno Cassola
Publisher:: INTERNATIONAL MONETARY FUND
Published Date:: September 2011
DOI:: http://dx.doi.org/10.5089/9781463904937.001
ISBN:: 9781463904937
ISSN:: 1018-5941
Page:: 42

China's financial prices are informative enough for the PBC to introduce a monetary policy framework centered around interest rates. While bond yields are not fully efficient?reflecting regulation, liquidity, and segmentation?we find they contain considerable information about the state of the economy as well as evidence of an emerging transmission channel: changes in PBC rates influence the structure of Treasury, financial, and corporate bond yield curves, which are then associated with changes in growth and inflation. Coporate spreads are also a leading indicator of growth and inflation. While further liberalization will strengthen both efficiency and transmission, several necessary elements to move towards indirect monetary policy are already in place.

Understanding Chinese Bond Yields and their Role in Monetary Policy

Understanding Chinese Bond Yields and their Role in Monetary Policy

Article

Understanding Chinese Bond Yields and their Role in Monetary Policy

Author(s):: Nathan Porter, and Nuno Cassola
Published Date:: September 2011

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Understanding Chinese Bond Yields and their Role in Monetary Policy

Understanding Chinese Bond Yields and their Role in Monetary Policy

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