It is expected that China issue more than 1 trillion yuan (CNY) in Special Treasury Bonds (STB) in the third quarter, to close the fiscal gap and help meet economic and employment goals, reports MNI, citing advisers from policy and market analysts.
Industry insiders also called on the central bank to increase liquidity to accommodate the debt sell-off.
According to a recent report from Renmin University, the government would face a tax gap of about 2.6 trillion yuan as tax revenues may decline throughout the year.
To cover the extra expense, analysts predict the government may launch between one and two billion yuan in STB special bonds in the third quarterif the Council of State proposes the same.
STBs are likely to be a necessary move if the country insists on a GDP growth target of around 5.5%says MNI.
Source: Fx Street
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