China's Money Market Rates Fell in August; Gold Trading Volume Surged

I. Money Market Operations

In August 2026, the average daily turnover of interbank lending reached 316.06 billion yuan, a year-on-year decrease of 24.6%. The average daily turnover of bond repurchase agreements in the interbank market stood at 6.5 trillion yuan, down 14.8% year-on-year. As of the end of August 2026, the outstanding balance of interbank lending was 0.9 trillion yuan, while the outstanding balance of bond repurchase agreements in the interbank market was 9.6 trillion yuan.

In August 2026, the monthly weighted average interest rate for overnight pledged repos of interest rate bonds among banking depository institutions (DR001) was 1.38%, down 1 basis point month-on-month. The monthly weighted average rate for DR007 was 1.40%, down 3 basis points month-on-month. The monthly weighted average rate for overnight pledged repos in the interbank market (R001) was 1.40%, down 2 basis points month-on-month. In August 2026, the average daily spread between DR001 and the central bank's 7-day reverse repo operation rate was -2 basis points, while the average daily spread between R001 and DR001 was 2 basis points.

• Figure 1: Money Market Interest Rate Trends
• Figure 2: DR001 vs. Central Bank Policy Rate, January–August 2026¹

II. Bond Market Operations

In August 2026, net financing of government bonds was 1,009.73 billion yuan, a year-on-year decrease of 357.46 billion yuan. Net financing of corporate bonds was 271.25 billion yuan, an increase of 137.40 billion yuan year-on-year. As of the end of August 2026, the total custody balance of the bond market was 209.0 trillion yuan.

In August 2026, the turnover of the cash bond market was 39.2 trillion yuan, up 4.8% year-on-year. The turnover rate of cash bonds in the interbank bond market was 18.3%, down 0.9 percentage points month-on-month. The bid-ask spread for active 10-year government bonds was 0.15 basis points. As of the end of August 2026, the yield on 10-year government bonds stood at 1.69%. The yield spread between 10-year and 1-year government bonds was 47 basis points, narrowing by 10 basis points month-on-month. The spread between the yield on 3-year AAA-rated medium-term notes and the yield on 3-year government bonds was 43 basis points (excluding bond tax policy factors), widening by 3 basis points month-on-month. In the first eight months of 2026, the cumulative issuance of panda bonds reached 213.98 billion yuan, and 29 new foreign institutions entered the interbank bond market.

• Figure 3: Government Bond Yield Trends
• Figure 4: Changes in the Government Bond Yield Curve, August 2026

III. Derivatives Market Operations

In August 2026, the turnover of the RMB derivatives market in the interbank market was 6.9 trillion yuan, up 17.0% year-on-year. As of the end of August 2026, the closing price (average) of the 1-year FR007 swap rate was 1.43%, down 1 basis point month-on-month.

In August 2026, the turnover of the government bond futures market was 11.9 trillion yuan, up 12.0% year-on-year. As of the end of August 2026, open interest in government bond futures stood at 896,000 lots, up 62.0% year-on-year. The closing price of the main 10-year government bond futures contract was 109.4 yuan, essentially unchanged month-on-month.

IV. Bill Market Operations

In August 2026, the amount of commercial bills accepted was 3.4 trillion yuan, and the amount of bills discounted was 2.5 trillion yuan. As of the end of August 2026, the outstanding balance of commercial bills accepted was 22.3 trillion yuan, up 10.3% year-on-year. The outstanding balance of bills discounted was 17.8 trillion yuan, up 13.3% year-on-year.

Table 1: Bill Issuance and Discounting by Small and Micro Enterprises, August 2026

| Category | Number of Enterprises (Share of Total) | Issuance Amount (Share of Total) | Number of Enterprises (Share of Total) | Discount Amount (Share of Total) | |----------|----------------------------------------|----------------------------------|----------------------------------------|----------------------------------| | Enterprises issuing bills | 113,000 (93.5%) | 2.4 trillion yuan (70.4%) | — | — | | Enterprises discounting bills | — | — | 134,000 (96.6%) | 1.9 trillion yuan (74.1%) |

V. Gold Market Operations

As of the end of August 2026, the Au(T+D) contract on the Shanghai Gold Exchange closed at 961.1 yuan per gram, up 8.6% month-on-month. In August 2026, gold trading volume on the Shanghai Gold Exchange reached 6,707.3 tons, up 66.9% year-on-year. Gold trading volume on the Shanghai Futures Exchange reached 17,000 tons, up 71.5% year-on-year.

VI. Foreign Exchange Market Operations

As of the end of August 2026, the closing price of the RMB against the U.S. dollar in the interbank foreign exchange market was 6.7198, representing an appreciation of 0.41% from the end of the previous month. The CFETS RMB Index stood at 101.87, a depreciation of 0.31% from the end of the previous month.

VII. Stock Market Operations

As of the end of August 2026, the Shanghai Composite Index (1A0001) closed at 3,986.3 points, up 4.0% month-on-month. The Shenzhen Component Index (399001) closed at 14,015.0 points, up 3.2% month-on-month. In August 2026, the average daily turnover of the two stock exchanges was 2,241.45 billion yuan, down 16.5% month-on-month.

VIII. Holder Structure of the Interbank Bond Market

As of the end of August 2026, there were 3,751 institutional members in the interbank bond market, all of which were financial institutions. In terms of bond holdings, the top 50 investors² in corporate credit bonds accounted for 54.2% of total holdings, concentrated mainly in large state-owned commercial banks (proprietary), public funds (asset management), and trust companies (asset management). The top 200 investors accounted for 85.3% of total holdings.

Table 2: Holder Structure of Corporate Credit Bonds in the Interbank Bond Market

| Average Number of Holders per Bond | Median | Maximum | Minimum | Share of Bonds with 20 or Fewer Holders | |------------------------------------|--------|---------|---------|------------------------------------------| | 12 | 12 | 128 | 1 | 87.4% |

In August 2026, in terms of trading volume, the top 50 investors in corporate credit bonds in the interbank bond market accounted for 62.3% of total trading, concentrated mainly in securities companies (399975) (proprietary), joint-stock commercial banks (proprietary), and fund companies (asset management). The top 200 investors accounted for 91.9% of total trading.

Sources: China Securities Regulatory Commission, State Administration of Foreign Exchange, China Central Depository & Clearing Co., Ltd., China Foreign Exchange Trade System & National Interbank Funding Center, Shanghai Clearing House, Shanghai Commercial Paper Exchange Corporation, Shanghai Gold Exchange, Shanghai Stock Exchange, Shenzhen Stock Exchange, Beijing Financial Assets Exchange

Notes:

1. The central bank policy rate refers to the 7-day reverse repo operation rate of the People's Bank of China.
2. Proprietary investors and agency investors are counted separately. The same applies below.