Dec. 24 (Bloomberg) -- China’s central bank may auction seven-day reverse-repurchase contracts on Dec. 27 only this week to avoid a conflict with the holiday schedule, according to two traders required to bid at the auctions.
The securities’ interest will start to accrue on the following day and they will mature on Jan. 4, said the traders, who asked not to be identified. If the central bank issued such securities tomorrow, redemption would coincide with a Jan. 1 holiday. Reverse repos involve short-term asset purchases that add funds to the banking system and seven-day contracts are typically auctioned on Tuesdays and Thursdays.
The People’s Bank of China also gauged demand for auctions of 28-day reverse-repurchase agreements tomorrow and 14-day contracts on Dec. 27, according to the traders. China’s financial markets will be shut from Jan. 1 to Jan. 3. Calls to the press office at the central bank were not answered.
To contact Bloomberg News staff for this story: Judy Chen in Shanghai at firstname.lastname@example.org.
To contact the editor responsible for this story: James Regan at email@example.com.