According to Reuters on Tuesday, China will tighten monitoring on several thousand local government financial vehicles (LGFVs), barring new LGFVs from selling bonds publicly, to close loopholes in a strategy to handle municipal debt difficulties. two people with knowledge of the topic said.
By scrutinising the LGFVs, Chinese officials want to prevent them from obtaining funds from new organisations or shell businesses, which might exacerbate the debt situation.
Market reaction
With the positive development news in China, AUD/USD climbs above 0.6400, and NZD/USD edges higher to 0.5917 at the press time