SHANGHAI: China's key money rate fell 20 basis points to a 13-month low on Thursday as liquidity conditions remained ample and offset a net drain of funds via open market operations this week.
The People's Bank of China (PBOC) drained 30 billion yuan ($4.74 billion) via 91-day repurchase agreements on Thursday, taking the total net drain of funds this week to 78 billion yuan.
A dealer at a Chinese commercial bank in Shanghai said big banks had plenty of cash on hand and were lending to smaller institutions.
"Overall, we are not lacking money," he said.
Signs of further slowdown in the Chinese economy have led to expectations that the authorities will maintain easy money conditions to encourage lending and support growth.
Data released on Thursday show that the HSBC Flash Purchasing Managers Index, the earliest indicator of China's industrial activity, shrank further in May, underscoring worries of a sharper slowdown than first thought.
The benchmark weighted-average seven-day bond repurchase rate slumped 20.71 basis points to 2.2308 percent, its lowest point since April 2011.
The 14-day money rate rose slightly to 2.7823 percent at midday, while the overnight rate inched up 4.32 bps to 1.8944 percent.
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