(Yicai Global) Oct. 26 – China's treasury bonds slipped further today despite the People's Bank of China (PBOC), the country's central bank, denied rumors that it will reduce the proportion of interbank liabilities in commercial banks' total liabilities.
The main contract price for the 10-year Treasury Bond dropped 0.32 percent to CNY93.345 (USD14.07) at 9.40 a.m., the lowest in nearly nine months.
China's treasury bonds plunged yesterday after some rumors circulated suggesting the central bank will reduce the proportion of interbank liabilities of commercial banks from one-third to one-quarter.
Interbank liabilities are an important source of funds for the small- and medium-sized banks. Reducing the proportion would cut their funding, which could lead to tight liquidity and strain the bond markets.
PBOC denied the rumors last night.