SHANGHAI, May 18 (Reuters) - Foreign investors cut their holdings of Chinese yuan-denominated bonds for the third consecutive month in April, the longest such stretch on record, as a sliding yuan and evaporating yield premiums on Chinese debt ate away at the instruments' appeal.
Investors outside of China held Chinese bonds worth a total of 3.77 trillion yuan at the end of April, according to Reuters calculations on data released by the China Central Depository & Clearing Co (CCDC) and the Shanghai Clearing House on Wednesday.
That was down 2.8% from a month earlier.
Holdings of Chinese bonds by offshore investors had also fallen 2.82% in March, the steepest monthly drop since January 2017, and 1.97% in January.
The April total included holdings of Chinese government bonds (CGBs) worth 2.39 trillion yuan, down 1.7% from a month earlier, and policy bank bonds worth 965 billion yuan.
It was the first time foreign holdings of the quasi-sovereign bonds, which yield more than CGBs of the same tenor and are among the most liquid instruments traded on China's interbank bond market, had dipped below 1 trillion yuan since March last year.
The release of the data came after a lengthy delay that CCDC on Tuesday attributed to epidemic-related factors.
The delay had sparked market speculation that officials might be attempting to hide the scope of outflows from Chinese assets as a slowing economy and rising U.S. yields weighed heavily on the yuan.
Data released last week by the International Institute of Finance (IIF) showed the largest quarterly capital outflows on record for China in the first quarter.
The yuan fell more than 4% against the dollar in April, while benchmark Chinese 10-year government bonds yielded around 16 basis points less than their U.S. equivalents on Wednesday, down from a nearly 125 basis point premium at the end of 2021.
($1 = 6.7470 Chinese yuan) (Reporting by Andrew Galbraith; Editing by Muralikumar Anantharaman and Kim Coghill)
