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China Money Rate Climbs Most in 4 Weeks as Month-End Approaches

Nov. 28 (Bloomberg) -- China’s money-market rate climbed the most in four weeks on speculation cash supply will tighten as banks hoard funds to meet month-end requirements.

The People’s Bank of China today gauged demand for seven-and 14-day reverse-repurchase contracts before an auction tomorrow, according to a trader required to bid at the sales. Preparatory work for starting sovereign debt futures is “basically complete,” the China Securities Journal reported today, citing Jiang Yang, vice chairman of China Securities Regulatory Commission.

“The rising repo rates show banks are probably concerned about the month-end cash supply,” said Wang Huane, a senior bond trader at Qilu Bank Co. in Jinan, capital of eastern Shandong province.

The seven-day repurchase rate, which measures interbank funding availability, gained 47 basis points to 3.36 percent at the close, the biggest increase since Oct. 29, according to a weighted average compiled by the National Interbank Funding Center. A basis point is 0.01 percentage point.

The one-year interest-rate swap contract, the fixed cost needed to receive the floating seven-day repo rate, was unchanged at 3.40 percent, according to data compiled by Bloomberg.

The yield on the 3.1 percent government bonds due September 2015 dropped two basis points to 2.98 percent, according to the Interbank Funding Center.

To contact Bloomberg News staff for this story: Judy Chen in Shanghai at xchen45@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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