Bonds fall as central bank drains funds from system
China's government bonds fell after the central bank drained funds from the financial system for the first time in eight months.
The People's Bank of China conducted 30 billion yuan ($4.8 billion) of 28-day repurchase agreements on Tuesday and didn't offer any reverse contracts that add cash to the money market, according to a statement.
The contracts were offered at a yield of 2.75 percent, unchanged from the previous sale of similar-maturity securities on June 19. "The central bank is probably worried that there is too much money in the banking system," said Wang Huane, a senior trade r at Qilu Bank Co in Jinan, the capital of Shandong province.
