SHANGHAI: China's seven-day and 14-day money rates jumped on Monday thanks to an increase in cash demand as banks prepare for the end of the month and the beginning of the Chinese New Year holiday period in February, dealers said.
The weighted-average rate of the 14-day bond repurchase rate , set to mature in the midst of the Spring Festival Holiday, jumped 68 basis points to 3.63 percent from 2.95 percent at the close on Friday, its highest level since early January.
Traders said the jump is partly because the the People's Bank of China (PBOC) is likely to abstain from issuing bonds that mature while markets are closed for the holiday week, dealers said.
The benchmark weighted-average seven-day bond repurchase rate jumped 28 basis points to 2.98 percent from 2.70 percent, but the one-day repo rate inched down to 2.10 percent.
Dealers said they expected to get through the upcoming holiday season more smoothly than last year after regulators said they will permit 12 primary dealers to bid for bond repurchase agreements on a daily basis in order to increase the monetary authority's flexibility in managing short-term liquidity.
Comments
Comments are closed.