China issues first variable “DR”-based bonds in rate reform push
China’s first bond with a variable interest rate tied to a key benchmark dubbed “DR” was issued on December 4, 2020, marking the latest step by the central bank to improve the pricing mechanism for financial markets.
China is joining other major economies in reforming its benchmark rate framework, as the London Interbank Offered Rate (Libor), once the most widely used global benchmark, is being phased out.
The People’s Bank of China (PBOC) said in August that it will make Depository-Institutions Repo Rate, or DR, a key reference for monetary policy adjustment and market price-setting.
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