China Money Rate Climbs Most in Month on Bill Rollover

China’s benchmark money-market rate climbed by the most in almost a month after the central bank rolled over some maturing three-year bills.

The People’s Bank of China re-issued 51.5 billion yuan ($8.4 billion) of three-year bills at 3.5 percent, according to a statement posted on its website late yesterday. The monetary authority issued 29 billion yuan of seven-day reverse repurchase agreements at 3.9 percent today, and auctioned 50 billion yuan of three-month deposits at commercial banks on behalf of the Ministry of Finance at 4.75 percent, according to separate statements.

“The central bank’s policy intention now looks pretty clear, it wants to ensure short-term liquidity but lock up on the long end,” said Cheng Qingsheng, an analyst at Evergrowing Bank Co. in Shanghai. “The rates should be able to remain at the current level until the month-end, and the real challenge will be in late September.”

The seven-day repurchase rate, a gauge of cash availability in the banking system, climbed 39 basis points, or 0.39 percentage point, to 4.45 percent as of 10:07 a.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. That was the biggest increase since July 29.

The one-year swap contract, the fixed cost needed to receive the floating seven-day repo rate, was unchanged at 4.08 percent, data compiled by Bloomberg show.

The PBOC issued 36 billion yuan of reverse-repos at 3.9 percent a week ago, injecting a net 72 billion yuan into the financial system, following an addition of 47.5 billion yuan a week earlier. The rate on three-month treasury deposits at today’s auction advanced from 4.69 percent in the previous sale on Aug. 15.

The yield on the government’s 3.38 percent notes due May 2023 rose two basis points to 3.98 percent, according to the Interbank Funding Center.

To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net

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