Eurozone central bankers, struggling to boost the currency area’s flagging recovery, have received help from Beijing in delivering their €1.1tn quantitative easing plan thanks to sales of German government debt by the People’s Bank of China.
The PBoC’s reserve management wing, the State Administration of Foreign Exchange, has been selling some of its German government bonds since the ECB began buying them in March, say two sources close to central banks in China and Europe.
Safe does not deal directly with eurozone central banks, which purchase bonds from investors via banks’ bond trading desks. But its sales of Bunds are making life easier in the dealing rooms of Europe’s monetary powers, where traders have been handed the difficult task of finding €60bn of mostly government debt to buy each month as part of the QE package.
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