China’s currency has had a rough start to 2025. It is nearing a 16-month low and many economists predict it has further to fall.

China's central bank said on Friday it has suspended treasury bond purchases, triggering a jump in yields and spurring speculation that the move was aimed at defending a falling currency.

The unexpected action is intended to tamp down a potential bubble in the bond market fueled by investors shunning riskier assets like stocks and real estate.

The move comes as long-term yields on Chinese bonds hit fresh lows amid expectations of more monetary policy easing.

The bank halted its government bond purchases Friday in an attempt to slow a one-way bonds trade that's put unwanted downward pressure on the yuan, analysts say.

China’s central bank has hit pause on government bond purchases, a move that comes as long-term yields hit fresh lows amid expectations of more monetary policy easing. The People’s Bank of China cited excess demand for government bonds as the reason for its decision,

A statement from the People’s Bank of China (PBOC) from January 10 revealed that the central bank had halted government bond purchases as the supply remained lower than the bonds’ demand. The PBOC mentioned that the purchases would resume after properly monitoring the government bonds market supply and demand.