China’s State Administration of Foreign Exchange on Thursday called into question the accuracy of a report that Beijing was considering slowing or halting its purchases of US debt, suggesting the story might be “fake news”.
The regulator said in a statement on its website that “in recent days there have been some media reports” that China was considering slowing or halting its purchases of US Treasuries. “We believe this information may have been attributed to the wrong source or could be fake news.”
The regulator added that the government departments which manage China’s reserves “are all responsible investors, and related investment activities have promoted the stability of international financial markets and the preservation and appreciation of China’s foreign exchange reserves.”
The statement followed a report by Bloomberg on Wednesday citing unnamed sources as saying that senior officials in Beijing had recommended slowing or halting such purchases while reviewing China’s foreign exchange holdings.
The Bloomberg report sparked a sell-off of Treasuries that saw yields on 10-year notes, which move opposite to price, climb to a 10-month high. Yields on said sovereign bonds were down 2 basis points in Asia trading on Thursday at 2.537 per cent.
The dollar index, which tracks the greenback against a basket of peers, climbed 0.1 per cent following the statement’s release as the yen shed 0.3 per cent to ¥111.78 per dollar.
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