Markets

China's money rates flat, impact of RRR payment is limited

Published November 5, 2012 Updated November 5, 2012 05:47am

 

The benchmark weighted-average seven-day bond repurchase rate fell 4.14 basis points to 3.3320 percent from 3.3734 percent at the close on Friday.

 

The 14-day repo rate rose to 3.3964 percent from 3.3775 percent, and the shortest overnight one-day repo rate inched up to 2.7025 percent from 2.6609 percent.

 

"The money situation is still good and the impact of the reserve requirement ratio payments is not large," said a dealer at a Chinese commercial bank in Shanghai. "We are paying more attention on the amounts of central bank's reverse repos."

 

This week, maturing bills, repos, and reverse repos will drain a net 523 billion yuan from the banking system, which will be offset by any injections conducted by the central bank this week.

 

Last week, the People's Bank of China conducted a net injection of 379 billion yuan ($60.74 billion) into the banking system, the biggest injection since Reuters' records began.

 

Traders said rates may fall further by the middle of next week, when banks complete their reserve payments.

 

Copyright Reuters, 2012