PBOC instructs state banks to roll over local government debt at lower rates

Citing sources with knowledge of the matter,  Reuters reports that the People’s Bank of China (PBOC) instructed state banks to roll over local government loans with a longer term at lower interest rates.

Additional takeaways

New interest rates should not be lower than China's treasury bonds, with terms no longer than 10 years.

Pboc to set up an emergency liquidity tool with banks, loans made via the tool should be repaid in two years.

Market reaction

AUD/USD is little impressed by the above report, adding 0.15% on the day to trade at 0.6350.