SHANGHAI (Reuters) – China’s central bank said it bought special government bonds from primary dealers on Thursday, its first such bond purchase in nearly two years, reviving speculation it is preparing to intervene in the domestic debt market.

The People’s Bank of China (PBOC) purchased 400 billion yuan ($56.3 billion) worth of 10-year and 15-year bonds in open market operations, it announced on its website.

The news came a day after the central bank added a new section for announcements of its buying and selling of government bonds, kindling speculation that it is getting ready to intervene.

The central bank has been warning market participants for weeks about the inflated prices of bonds, which have driven yields to record lows, as banks and investors seek safe assets in a flailing economy.

The PBOC said in July it had hundreds of billions of yuan worth of bonds at its disposal to borrow, and would sell them depending on market conditions. Its purchase revived expectations that the PBOC will step in soon to sell the bonds to keep yields from falling further.

“Banks bought the treasuries from the finance ministry, and then sold them to the PBOC, which is ready to offload them in the market,” said a fund manager who declined to be identified.

The news did not affect bond yields. Traders pointed to a government announcement last week that it would roll over, rather than redeem, a batch of bonds maturing on Thursday. Some analysts said the PBOC’s bond buying was also meant to ensure that rollover of bonds did not impact cash conditions.

China’s 10-year government yield was last trading at 2.17%, down around 40 basis points this year.

“Concerns over long-term yields had initially decreased, but this announcement has stirred up market worries again,” said Xing Zhaopeng, senior China strategist at ANZ.

State banks have been seen selling bonds this month, and they sometimes act on behalf of the central bank.

In a move to temper the bond rally, China’s securities regulator has ordered some brokerages to inspect their bond trading activities.

The PBOC last bought special treasuries from primary dealers in December 2022.

($1 = 7.1001 renminbi)