China’s benchmark money-market rate rose the most in a month on concern a spate of initial public offerings of shares will increase demand for funds.
The seven-day repurchase rate, a gauge of funding availability between banks, climbed 19 basis points, or 0.19 percentage point, to 3.50 percent in Shanghai, according to a daily fixing by the National Interbank Funding Center. That was the biggest gain since July 23.
“The liquidity conditions these days aren’t as relaxed,” said Zhou Hao, Shanghai-based economist at Australia & New Zealand Banking Group Ltd. “The upcoming IPOs next week are quite big.” He estimates the sales will be about 300 billion yuan ($48.8 billion) to 400 billion yuan.
The People’s Bank of China’s open-market operations resulted in a net injection of 11 billion yuan this week, on top of the 14 billion yuan in the five days through Aug. 15, data compiled by Bloomberg show. The PBOC sold 10 billion yuan of 14-day repurchase agreements at a yield of 3.7 percent today, according to a statement on its website.
August’s preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 50.3, trailing all 22 estimates in a Bloomberg News survey of economists that had a median of 51.5. The measure dropped from July’s 51.7 and was at a three-month low. Numbers above 50 indicate expansion.
“The overall monetary policy should still remain relaxed especially after this morning’s very soft HSBC PMI data,” Hao said.
One-year interest-rate swaps, the fixed payment to receive the floating seven-day repurchase rate, were little changed at 3.68 percent in Shanghai, data compiled by Bloomberg show.
The yield on the 4 percent government bonds due June 2024 dropped one basis point to 4.28 percent, according to prices from the National Interbank Funding Center.