China’s benchmark money-market rate fell to the lowest this year on speculation debt maturing in March will add funds to the banking system.
There will be 687 billion yuan ($105 billion) of fixed-income securities maturing in March, according to Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong. The central bank sold three-month bills in open-market operations yesterday at a yield of 2.63 percent, a rate almost unchanged from last week’s sale. Policy makers have lifted banks’ reserve-requirement ratios five times since October.
“The auction yield on the three-month central bank bill was virtually unchanged from the last issue, with a small difference due to a technical reason, leading to market expectations for no imminent rate hike,” Cheung said.
The seven-day repurchase rate, a gauge measuring the availability of funds, dropped 23 basis points to 2.22 percent, according to a daily fixing from the National Interbank Funding Center published at 11 a.m. in Shanghai. That’s the lowest level since Dec. 7. A basis point is 0.01 percentage point.
The one-year swap contract tied to the seven-day repo rate slipped five basis points to 3.79 percent, according to data compiled by Bloomberg.
The yield on the government’s 3.77 percent bond due December 2020 climbed two basis points to 3.96 percent, according to Chinabond, the nation’s biggest debt-clearing house. That’s the biggest increase since Feb. 25.
The People’s Bank of China last ordered lenders to set aside more money as reserves on Feb. 24, raising the ratio by half a percentage point to 19.5 percent.