PBOC announces resumption of bill issuance

FXstreet.com (Barcelona) - The Chinese Central Bank announced today that it would resume bill issuance for the first time in 17 months, in an attempt to control the capital flowing into the country from overseas as foreign investors take advantage of the quick appreciation of the yuan.

The PBOC will auction 10 billion yuan of three-month bills on Thursday. “The sale of bills to mop up excess liquidity has not been used for the better part of the year and a half,” Marc Chandler, Global Head of Currency Strategy at BBH reminds. “It may presage larger drains of longer-term funds.”