China overtakes US in corporate debt sales

U.S. dollar-denominated corporate bond sales hit their lowest level in 11 years, while yuan-denominated bond sales outpaced dollar sales, according to Bloomberg data, as U.S. and Chinese central bank monetary policy divergences are the reason. insider.

China’s non-financial companies issued 2.04 trillion yuan debt (or about $306 billion at the exchange rate at the time) from April to August, while sales of dollar-denominated corporate debt totaled $283 billion.

The loose monetary policy of the Chinese authorities has allowed many firms to sell bonds at fairly low prices over the past decade, as the People’s Bank of China cut its key interest rate.

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At the same time, another central bank, the US Federal Reserve, is raising interest rates sharply to fight inflation, and sales of dollar-denominated bonds have fallen 40% this year to $592 billion, an 11-year low. The issuance of bonds in yuan decreased by about 6% in 2022.

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