Thursday, August 30, 2007

China sends sponges to mop up liquidity

China Sells $79 Billion Bonds to Set Up Reserves Fund

``The bond market will feel the impact of the special issue gradually as the central bank will use it mainly as a tool to absorb liquidity,'' said Lu Wenlei, an analyst with Shenyin Wanguo Securities Co. in Shanghai. Lu said the central bank will reduce issuance of bills to make room for the new debt.

Bloomberg.com: Worldwide

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