China’s loan collateral tweak will ease ‘asset famine’, state media says

 China’s central bank’s decision to lower the collateral requirement for medium-term loans will alleviate the “asset famine” pressure on the bond market, state media reported on Tuesday, citing a source.

The People’s Bank of China (PBOC) said on Monday it would lower the collateral requirement for the medium-term lending facility (MLF) loan to increase the size of tradable bonds in the market.

The move comes amid a record-long rally in China’s sovereign bond markets that has prompted repeated central bank warnings and measures to put a floor under falling yields and prevent a market bubble.

Source: REUTER