Economics
China Money Rate Jumps as Reserve Limits Hit Preferential Banks
- PBOC's market liquidity operations allow net cash withdrawal
- Limited reaction in bonds to rule scrapping investment quotas
Chinese Stocks Tumble Most in a Month
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China’s overnight money rate climbed by the most since the Lunar New Year holiday as some banks were obliged to set aside more funds as reserves at a time when open-market operations are draining cash from the financial system.
Effective Thursday, the People’s Bank of China normalized reserve requirements for some lenders that had been assigned preferential terms. The monetary authority has added 580 billion yuan ($88.8 billion) to the financial system this week via auctions of seven-day reverse-repurchase agreements, less than the 960 billion yuan of contracts that mature through Friday.