SHANGHAI, Jan 15: China’s key money rates rebounded slightly on Tuesday from one-month lows after the People’s Bank of China injected a mere 10 billion yuan ($1.61 billion) into money markets through open market operations.
China’s central bank issued 10 billion yuan worth of 14-day reverse bond repurchase agreements on Tuesday, but refrained from issuing seven-day reverse repos. Dealers said that adequate market liquidity meant there was little demand for the seven-day tenor.
‘Today’s rise is just a small rebound after rates sank yesterday, it doesn’t signify much,’ said a dealer at a large state-owned bank in Beijing.
‘(Financial) institutions have enough funds on hand. Besides, if we need more, we still have a chance (to take up seven-day reverse repos) on Thursday,’ he said.
Despite today’s move, market players expect the central bank to issue more seven-day reverse repos in upcoming weeks to meet growing cash demand for the Spring Festival Holiday, which starts on Feb. 9.
The benchmark weighted-average seven-day bond repurchase rate rose 7 basis points to 2.82 percent on Tuesday up from 2.75 percent at Monday’s close. Dealers consider rates below 3 percent indicative of ample money supply.
The 14-day repo rate gained slightly to 2.81 percent from 2.74 percent, and the one-day repo rate inched up to 2.10 percent from 2.04 percent.
(AGENCIES)
Trending Now
E-Paper
Follow our WhatsApp channel