China’s leadership could increase the size of an RMB1 trillion (US$161.3 billion) swap program exchanging local government debt for low-interest bonds by anywhere from RMB500 billion to as much as RMB1 trillion, Bloomberg reported, citing unnamed sources. In what would become the second stage of the current program, still more local-government loans would be authorized to be swapped into bonds issued by provinces and cities. Nicholas Zhu, a Beijing-based senior analyst for Moody’s Investors Service, said any additional quota would probably be for debt swaps in 2016.
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