China's money rates fall after large foreign exchange buys

SHANGHAI: China's money rates fell on Wednesday on ample liquidity and after data showed the country was a net buyer of foreign exchange in December.

Large foreign currency purchases constitute the creation of more base money and increase liquidity.

China's central bank and commercial banks bought 134.6 billion yuan ($21.64 billion) worth of foreign exchange on a net basis last month, central bank data showed on Tuesday.

The benchmark weighted-average seven-day bond repurchase rate fell 4 basis points to 2.77 percent from 2.81 percent at the close on Tuesday.

The 14-day repo rate was down slightly to 2.77 percent from 2.80 percent, and the one-day repo rate fell to 2.06 percent from 2.07 percent.

Dealers said they believe there is enough liquidity to get the system through the Spring Festival holiday smoothly. China's financial markets close from Feb. 9 to 17 for the Lunar New Year.