金融英语阅读：China lowers bill yields for 1st time in 15 months

　　China's central bank sold bills at a lower yield for the first time in 15 months, as a crackdown on property lending left the nation's banks with surplus cash.

　　The monetary authority issued 90 billion yuan ($13.2 billion) of three-year securities at a 2.74 　　percent yield, down from 2.75 percent at the last sale on April 8, according to a statement on its website. It soaked up a total of 65 billion yuan from the financial market this week, up from the 14 billion yuan last week, according to data compiled by Bloomberg.

　　The decline in yields eased concern the People's Bank of China would push money-market rates higher to further restrain lending, after the economy grew 11.9 percent in the first quarter from a year earlier. Regulators curbed loans for third- home purchases and increased down-payment requirements after property prices surged 11.7 percent in March from a year earlier, the most since records began in 2005.

　　"The decrease in the PBOC bill yield is probably due to the huge demand from banks," said Xu Xiaoqing, an analyst at China International Capital Corp, the nation's first Sino- foreign investment bank in Beijing. "It will prompt the market to speculate there is going to be less possibility the central bank will resume pushing up bill yields in the short term."

　　The cost of three-year onshore interest-rate swaps declined eight basis points to 2.89 percent, signaling investors pared bets for an increase in borrowing costs, according to Bloomberg data. That's the lowest level since Nov 30. The 10-year rate declined nine basis points to 3.82 percent. A basis point is 0.01 percentage point.

　　Absorbing cash

　　The central bank reintroduced three-year bills on April 8, the first issuance since June 2008, anticipating an increased need to absorb cash. It also sold 23 billion yuan of three-month bills today at a 1.4088 percent yield, unchanged for a 12th sale, according to the statement. The last time bill yields fell was an auction of three-month securities in January 2009.

　　The government has twice this year told banks to set aside more reserves to curb inflation pressure. Consumer prices rose 2.4 percent in March from a year earlier, slowing from a 2.7 percent pace in February, government data showed last week.

　　"It shows the central bank may want to delay other tightening policies, including interest rate hikes, after the government introduced the policies to curb the property market," said Jiang Chao, a fixed-income analyst in Shanghai at Guotai Junan Securities Co, the nation's largest brokerage by revenue. "The central bank is probably still worried the foundation for a recovery is not solid enough."

　　Stress tests

　　The Shanghai Composite Index has declined 8.2 percent this year, the world's fourth-worst performer. China's bank regulator has told the nation's larger banks to conduct quarterly stress tests on property loans and ensure risks are strictly controlled.

　　Bank of Communications Ltd, part-owned by HSBC Holdings Plc, slid 1.8 percent after saying it made fewer mortgage loans over the past two months. China Vanke Co and Poly Real Estate Group Co, the nation's top listed developers, dropped at least 1.5 percent.

　　Chinese banks extended a less-than-estimated 510.7 billion yuan of new loans in March. Some banks in Beijing are requiring down payments equal to 60 percent of a property's value for loans to buy third homes, the 21st Century Business Herald reported today, citing an unidentified Agricultural Bank of China official.