Chinese authorities in recent weeks halted a long, frenzied rally in the world’s second-largest bond market and squelched trading volume with repeated warnings about the risks of reckless buying.
Early this month a financial market association under the People’s Bank of China, the central bank, said it would investigate four rural commercial banks over suspected manipulation in the treasuries market.
The PBOC-backed Financial News pushed back on Saturday against claims by some market participants that the central bank was intervening in the market through administrative measures.
“As long as institutions trade in accordance with market principles and rule of law, the regulators will not directly intervene,” the newspaper cited an industry source as saying.
It said claims of market intervention were “muddying the waters”, citing people familiar with the matter.
The newspaper warned of the risk of a “stampede” in the bond market due to unilateral consensus behaviour.
Source: Economy - investing.com
