The People’s Bank of China (PBoC) announced it will reintroduce twice-monthly sales of three-year bonds today to reduce liquidity in the financial system, the Wall Street Journal reported. The bank said it would sell US$10.99 billion of three-month bills and nearly US$2.2 billion in three-year bonds in its regular open-market operation today. The PBoC introduced three-year bonds in 2004, but stopped regular sales in June 2008. The reintroduction of bonds is Beijing’s latest attempt to drain excess money from markets without resorting to broader tightening measures. The central bank has already raised commercial banks’ reserve requirement ratios twice this year.
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