Strong Demand from Asian Central Banks for Australia Government Bonds
- Published on
- 24 Sep 2020, 12:30 PM
By Sophia Rodrigues
Central banks have shown strong interest in Australian government bonds, buying 12.3% of the latest 2026 bond, the largest proportion taken up by them at a syndication since March 2014.
The location of the central banks is not revealed in the data but it is entirely possible much of the demand is coming from Asian central banks given 28.1% of investors at the syndication were from Asia ex-Japan.
The total amount of the 0.5% 21 September 2026 bond sold at the syndication on Wednesday was A$25 billion, which means central banks bought A$3.1 billion of bonds.
The 2026 syndication attracted a record A$66.13 billion orderbook, marginally surpassing the previous record for A$66.07 billion. The A$25 billion amount sold was a new record, comfortably beating the previous high of A$21 billion held by the December 2031 bond.
In terms of proportion, the 12.3% was the largest since 16.6% in March 2014 at the syndication of the April 2026 bond back then. In absolute terms, it was A$1.2 billion then.
The largest-ever allotment taken by central banks at a syndication was in 2013 when they picked up 27.7% of the total A$5.9 billion issued.
From 5.4% at the first syndication this year, central banks participation have been gradually increasing this year but the 12.3% allotment was a big jump from the 8% at the November 2025 and 5.6% at the November 2031 syndications.