China Money Rate Completes First Monthly Decline Since August

China’s benchmark money-market rate had its first monthly drop since August as cash injections by the central bank boosted interbank fund supply.

The People’s Bank of China added a net 56 billion yuan ($9.2 billion) in the four weeks through Nov. 28, compared with a withdrawal of 40.4 billion yuan in the previous four weeks, data compiled by Bloomberg show. The authority sold 19 billion yuan of 14-day reverse-repurchase contracts yesterday at 4.3 percent, according to a statement on the website.

The seven-day repurchase rate, a gauge of funding availability in the banking system, fell 31 basis points, or 0.31 percentage point, this month to 4.72 percent as of 4:15 p.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. The rate advanced to a two-week high of 5.45 percent on Nov. 18, and declined 21 basis points today.

“After the rates spiked in the middle of the month, the PBOC realized that it needed to do something to calm the markets, especially given the fact there will be 65 billion yuan of reverse repos maturing next week,” said Liu Wenbo, an analyst at Shanghai Cifco Futures Co. “I think it’ll continue to inject through reverse repos next week.”

The cost of one-year interest-rate swaps, the fixed payment needed to receive the floating seven-day repo rate, rose 37 basis points this month to 4.53 percent, according to data compiled by Bloomberg. It gained four basis points today.

The yield on government bonds due August 2023 rose 22 basis points this month to 4.4 percent, according to the Interbank Funding Center. The rate fell two basis points today.

— With assistance by Helen Sun

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE