The American Federal Reserve and the People’s Bank of China are increasingly diverging in their monetary policy strategies, and Chinese corporate bond transactions have surpassed those in the US in recent months, Bloomberg reported.
Issuance of debt denominated in yuan by non-financial companies totaled 2.04 trillion yuan or approximately 306 billion dollars between April and August.
At the same time, sales of corporate debt denominated in dollars amounted to a total of 283 billion dollars. Beijing’s monetary policy has enabled numerous companies to sell bonds at the lowest prices in over a decade. The People’s Bank of China has lowered key interest rates in an attempt to strengthen the weakened Chinese economy affected by the COVID-19 pandemic.
Meanwhile, the Federal Reserve is aggressively raising interest rates to curb inflation, and dollar-denominated debt sales have fallen 40 percent to 592 billion dollars so far. This is the lowest level in the last 11 years, Bloomberg reported.
Issuance of yuan-denominated bills has fallen by about six percent this year. Nevertheless, total dollar debt issuances to date are still higher than those in yuan, considering that the trend of debt sales in China reflects the size of its economy, but not the international popularity of the yuan.
