Ten-year government bond yield falls to 1.69 percent in August
China's interbank bond market custody expanded to RMB209.0 trillion in August 2026, while the 10-year government bond yield closed at 1.69 percent. Interbank repo rates eased across the board, with DR007 declining 3 basis points to 1.40 percent.
Repo rates soften beneath policy benchmark
In August 2026, money market benchmarks declined slightly, with the weighted average DR001 falling 1bp month on month to 1.38 percent and DR007 dropping 3bp to 1.40 percent.
The overnight pledged repo rate R001 stood at 1.40 percent, reflecting a 2bp spread over DR001. Interbank bond repo turnover averaged RMB6.5 trillion daily, down 14.8 percent year on year, while interbank lending daily turnover shrank 24.6 percent to RMB316.06 billion.
In the bond market, total custody reached RMB209.0 trillion.
Net government bond financing dropped by RMB357.46 billion year on year to RMB1,009.73 billion, whereas corporate net bond financing rose by RMB137.40 billion to RMB271.25 billion.
Cash bond transactions reached RMB39.2 trillion.
Gold volumes expand while credit holdings concentrate
The 10-year government bond yield closed at 1.69 percent, narrowing the 10-year to 1-year yield spread by 10bp to 47bp.
Gold trading expanded rapidly, with SGE turnover climbing 66.9 percent year on year and the Au (T+D) price rising 8.6 percent to RMB961.1 per gram.
In the corporate credit bond market, ownership remained highly concentrated: the top 50 financial institutions held 54.2 percent of all outstanding corporate credit bonds and executed 62.3 percent of total trading volume.
Abundant cash, narrow market depth
Short money market rates sit comfortably below the central bank repo benchmark.
Yet extreme holding concentration among top tier institutions leaves credit trading vulnerable to liquidity shocks.
Falling repo turnover shows market participants remain cautious despite rising bond custody totals.
Source: Financial Market Report (August 2026)
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