The monthly value of local government bonds issued in June may reach a three-year high of nearly 900 billion yuan (about 131 billion U.S. dollars).
From June 1 to 23, the country issued a total of 594.2 billion yuan in local government bonds, according to Wind Info, a financial information provider.
There are still local government bonds worth more than 300 billion yuan planned to be issued in the final week of this month, which may bring the monthly total to almost 900 billion yuan, Xinhua reported.
Local gov't bonds sold like hot cakes
The first batch of local government bonds over-the-counter started selling in March and April. Bureau of Finance of Ningbo, Zhejiang, Sichuan, Shaanxi, Shandong and Beijing were the first to issue local government bonds in the over-the-counter (OTC) market as pilot players. Both financial institutions and individuals are encouraged to invest in such bonds.
When Ningbo sold the first batch of bonds to retail investors, an amount of 43 million U.S. dollars was snapped up in just five hours, Reuters reported.
The second batch of local debts was also very welcomed by investors, with a minimum investment threshold of 100 yuan (about 14.5 U.S. dollars) started selling during June 14 to 20, piloted in Shanghai, Guangdong, Hainan and Guangxi.
Compared to the first batch of local bonds, the second batch is more diverse, mainly used for major projects including highways, gas and power supply, railways, Xinhua reported.
A stabilizer for economy growth
As the country's measures to cut taxes and fees weigh on fiscal revenue, issuing local government bonds has become an important supplement to local fiscal revenue.
The record of monthly local government bond issuance came in April 2016, when the value reached 1.06 trillion yuan. The amount also exceeded 1 trillion yuan in June 2016.
This year's government work report made it clear that the country will make effective use of the role of local government bonds.
China will issue 2.15 trillion yuan of special local government bonds this year, up by 800 billion yuan from last year, according to Xinhua.
(With input from Xinhua News)
Copyright © 2018 CGTN. Beijing ICP prepared NO.16065310-3
Copyright © 2018 CGTN. Beijing ICP prepared NO.16065310-3