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Finance Ministry sells $650 million in Dim Sum bonds in Hong Kong

China’s Ministry of Finance has announced the sale of 4.5 billion yuan  in dim sum bonds in Hong Kong on Wednesday, including 1.5 billion yuan in five-year bonds with a yield of 3.8 per cent to institutional investors and 3 billion yuan in two-year notes with a yield of 3.65 per cent, alongside a further 500 million yuan of debt to overseas central banks.

The rates put the cost of the sale on par with MOF’s last auction in July, despite a more than 10 basis point rise in the yield on benchmark 10-year sovereign bonds in the onshore market over the past several months on the back of both tighter liquidity and rising Chinese consumer prices.

Observers see Chinese bonds benefiting from looser monetary policy in future as Beijing seeks to mitigate the impact of escalating trade tensions with the US.