China government bonds close higher after the PBOC injected a net CNY225 billion through its regular open-market-operations this week, the biggest injection of funds into the money market in nearly six months. "The central bank is trying hard to improve money market liquidity and bolster the sagging economy," says a Beijing-based trader with a local brokerage. He reckons the central bank is very likely to cut banks' reserve requirement ratio again in mid-July, as 2Q GDP growth, due July 13, is expected to have slowed to around 7.5% from 1Q's 8.1% expansion. The Shanghai exchange government bond index ends at 133.80 vs 133.78 at Wednesday's close, and is tipped to extend gains in coming days.
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