China’s overnight money-market rate climbed for a seventh day, the longest winning streak in four months, as demand for cash increased before the weeklong Lunar New Year holiday that begins Feb. 11.
The People’s Bank of China today gauged appetite for an offering of 14-day reverse-repurchase agreements tomorrow, according to a trader at a primary dealer required to bid at the auctions. The monetary authority added a record 450 billion yuan ($72 billion) into the financial system yesterday to ensure funds are enough to meet the holiday demand.
“Liquidity is tight but not as tight as last year,” said Pin Ru Tan, a Hong Kong-based strategist at HSBC Securities Asia Ltd. “Money-market rates should be under control.”
The one-day repurchase rate, a gauge of interbank funding availability, rose 37 basis points, or 0.37 percentage point, to 3.63 percent in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. The rate touched 3.66 percent earlier, the highest level since Jan. 9.
The one-year interest-rate swap contract, the fixed cost needed to receive the floating seven-day repo rate, was little changed at 3.17 percent, according to data compiled by Bloomberg.