China Money Rate Surges to 7-Month High Before Weeklong Holiday
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China’s overnight money-market rate climbed to a seven-month high on speculation cash shortages will worsen as banks hoard funds to meet quarter-end capital requirements and demand for holiday withdrawals.
The People’s Bank of China gauged demand for 14- and 28-day reverse-repurchase contracts this week, according to a trader required to bid at the auctions. The central bank used money-market operations to inject a net 101 billion yuan ($16 billion) of capital last week to ease the cash crunch. China’s financial markets will close from Oct. 1 for the weeklong National Day and Mid-Autumn holiday.