SHANGHAI: China's money rates were mixed on Monday, with the key seven-day repo posting a slight fall while the 14-day repo rate moved upward due to rising demand for cash to hold banks over through a forthoming week-long holiday period, dealers said.
The 14-day repo rate, a contract which would actually mature in early October given that markets will be closed for the first week in October, jumped 21.17 basis points to 3.4717 percent, up from 3.2600 percent.
"Funds in the market are quite stable today, and demand is still focused on 1- and 14-day repos," said a dealer at a city commercial bank in Shanghai.
Dealers said they expect rates to rise further in the coming two weeks as banks stockpile cash to meet regulatory ratio assessments and to satisfy demand during the holiday period.
Markets will be closed from September 30 to October 7 for the Mid-Autumn Festival and the National Day holiday.
China's central bank issued 28-day reverse bond repurchase agreements last week for the first time since it started regular open market operations in 2003, signaling regulators' determination to stick to using short-term tools to manage liquidity rather than interest rates or banks' reserve requirements.
The central bank surveyed commercial banks about their demand for seven-day and 28-day bond repurchase agreements on Tuesday, but once again refrained from surveying demand for 14-day instruments, just as it did last week.
The benchmark weighted-average seven-day bond repurchase rate fell 12.08 basis points to 3.2408 percent from 3.3616 percent at the close on Friday, and the shortest overnight one-day repo rate rose to 2.7308 percent from 2.6795 percent.
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