China Overnight Rate Drops to 1-Month Low as Minsheng Sale Ends

China’s overnight money-market rate fell to a one-month low as China Minsheng Banking Corp.’s convertible bond sale ended, releasing funds from unsuccessful bidders back into the financial system.

The Beijing-based lender raised 20 billion yuan ($3.2 billion) from the offering, data compiled by Bloomberg show. Guotai Junan Securities Co. estimates the issuance had locked up 450 billion yuan of capital, and excess funds are being returned starting today. The Ministry of Finance sold 22 billion yuan of 10-year notes today at 3.5198 percent, according to a trader at a finance company that participates in government debt auctions.

“Liquidity is released after the Minsheng bond sale,” said Liu Junyu, a bond analyst in Shenzhen at China Merchants Bank Co., the nation’s sixth-biggest lender. “But liquidity was quite loose to begin with. The repo rate will stay around the current level in the next one to two months.”

The one-day repurchase rate, which measures interbank funding availability, dropped 17 basis points, or 0.17 percentage point, to 2.03 percent as of 4:11 p.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. It touched 2 percent earlier, the lowest level since Feb. 21.

The one-year interest-rate swap, the fixed cost needed to receive the floating seven-day repo rate, was little changed at 3.27 percent, according to data compiled by Bloomberg.

The yield on the 2.91 percent government bonds due April 2015 rose one basis point to 3.09 percent, according to the Interbank Funding Center.

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