SHANGHAI, Apr 16: China’s money rates moved in a small range on Tuesday as the central bank’s open market operations signaled its intention to keep money conditions comfortable in the near term.
The benchmark seven-day bond repurchase rate rose six basis points to 3.03 percent by midday, while the overnight rate slipped three bps to 2.02 percent, and the 14-day rate fell 1.38 bps to 3.05 percent.
China’s central bank drained 58 billion yuan ($9.4 billion)from the money markets through 28-day bond repurchase agreements on Tuesday, traders said.
But with a combined 39 billion yuan in central bank repos and bills maturing on Tuesday, the net result was an injection of 19 billion yuan into the markets, according to Reuters calculations.
Maturing bills and repos will inject 87 billion yuan into the banking system for the entire week.
But traders said the money rates could rise in coming days as they expect major deposit outflows in April and May due to corporate tax payments. In those two months last year, firms paid a combined 700 billion yuan ($113 billion) in taxes, according to a Reuters calculation based on official data.
(AGENCIES)
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