Key facts
- China's bond market is a key credit source, enabling the central bank to reduce borrowing costs.
- New monetary policy tools are expected to reduce money-market fluctuations and support bonds.
The growing role of China's bond market in supplying credit to domestic borrowers has provided the nation's central bank with an important mechanism for enacting widespread reductions in borrowing expenses. Analysts anticipate that the People's Bank of China's latest refinement of its monetary policy toolkit will further damp money-market volatility and support bonds, thereby stabilizing financial markets.