(Yicai Global) Jan. 19 -- China’s Ministry of Finance has begun to make public the yield rates of two-year government bonds from Jan. 15 to optimize these treasuries’ yield curves to reflect the market’s supply-demand relations and help their rates better serve as price benchmarks.

The ministry has thus far announced nine terms for these treasury bonds’ yield curves, i.e. three and six months, and one, two, three, five, seven, 10 and 30 years, the agency announced today on its official website.

The ministry enhanced the transparency of bond issuance and management and price discovery function by launching its year-long plan targeting two-year state bonds at the start of 2018 and simultaneously led the listing of two-year treasury futures at the China Financial Futures Exchange to yield the rate data of two-year government bonds, the regulator said.

The ministry also inducted the two-year treasury bond into the category of key-term government notes at last year’s start, and listed it among those used in market making to increase its negotiability in the secondary market.

The ministry will also pilot publication of the yield curves of treasury bonds with great frequency during daylight hours by adding short-term bonds, it said, adding it will also institute various measures to make national bonds more fluid in the secondary market to further improve their yield curve, which is deemed a benchmark for market pricing.

The agency has announced the arcs of one-year, three-year, five-year, seven-year, 10-year and state bonds with key terms since 2014, further adding the curves of three-month, six-month and 30-year treasury bonds in 2015 and 2016.

These bows have grown into an authoritative pricing benchmark in the domestic bond market over years of development that precisely depicts the yields of those with differing terms at maturity in the national bond market of onshore Chinese yuan, and reflects the market’s risk-free interest rate.

Editor: Ben Armour