Economics
China Money Rate Falls as PBOC Keeps Cash Flush as Holidays Near
- Central bank conducts 100 billion yuan of reverse repos
- Money-market tightness has already eased, says SWS analyst
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China’s overnight money-market rate declined to the lowest level in a week as the central bank made use of daily open-market operations to keep the financial system flush with cash before the Chinese New Year holidays.
The People’s Bank of China auctioned 100 billion yuan ($15.2 billion) of reverse-repurchase agreements on Tuesday, more than the 80 billion yuan of contracts that matured. The monetary authority injected almost 2 trillion yuan using short- and medium-term lending tools last month, seeking to prevent borrowing costs from rising as seasonal demand for funds climbs along with record capital outflows.