March 5 (Bloomberg) -- China’s money-market rate fell for a seventh day, the longest run of declines since 2008, after Premier Wen Jiabao pledged to maintain a “prudent” monetary policy and set the nation’s growth goal at the least since 2004.
The seven-day repurchase rate, which measures interbank funding availability, also slid after the central bank didn’t gauge demand for bill sales this week, according to a trader at a primary dealer required to bid at the auctions. The PBOC estimated demand for 28- and 91-day repurchase agreements, the trader said. China will target 7.5 percent growth this year, Wen said in a state-of-the-nation speech in Beijing today.
“The government has signaled that it’ll carefully inject money into the system when the situation proves necessary,” said Frances Cheung, a Hong Kong-based senior strategist at Credit Agricole CIB. “The seven-day repo rate should hover around 3 percent to 3.5 percent as Wen has hinted the government won’t ease monetary policy aggressively to pump up growth.”
The seven-day repo rate fell 12 basis points, or 0.12 percentage point, to 3.15 percent as of 4:56 p.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center.
The one-year swap contract, the fixed cost needed to receive the floating seven-day repo rate, fell two basis points to 3.32 percent, according to data compiled by Bloomberg. The yield on the 3.94 percent government bonds due January 2021 rose one basis point to 3.58 percent, according to quotes provided by the Interbank Funding Center.
-- Editors: Andrew Janes, Ven Ram
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