China: Another milestone in financial market liberalisation - ANZ

Khoon Goh, analyst at ANZ, notes that for the Chinese economy, today sees formal entry of onshore bonds into the Bloomberg Barclays Global Aggregate Index, another important milestone in the country’s financial market liberalisation.

Key Quotes

“We estimate potential foreign bond inflows of USD150bn over the 20-month phase-in period from asset managers tracking the Global Aggregate Index.”

“Inclusion in other major bond indexes is only a matter of time. Alongside equity index re-weighting and further FX reserve allocation into RMB, the expected pick-up in foreign portfolio inflows will help offset the narrowing in China’s current account surplus and support the yuan.”