China Rate Swap Declines for Third Day as PBOC Halts Bill Sales
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The cost of locking in China’s interest rates fell for a third day, the longest run of declines in a month, as the central bank refrained from selling bills amid the worst cash crunch in at least a decade.
The People’s Bank of China sold three-month bills on May 9 for the first time since 2011 and has held twice-weekly auctions of the securities in all but one of the last six weeks. It won’t sell bills or conduct open-market operations today, according to traders at primary dealers required to bid at the auctions. The nation’s liquidity risk is controllable and money-market rates will be kept at a “reasonable” level, PBOC official Ling Tao said today in Shanghai.