PBOC may use new tools to prop up local govt bonds

Measures could include liquidity infusion through policy banks, say sources

The People's Bank of China, the central bank, is considering new monetary tools to shore up the local government bond market, which could see issuances of about 1.6 trillion yuan ($258 billion) this year, analysts said.

While the central bank may not directly purchase the bonds, it would still be present in the market with the targeted re-lending scheme, the sources said.