China Swap Rate Rises Most This Week Since June as Cash Drained
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China’s interest-rate swaps rose the most since June this week as the central bank drained funds from the banking system, and on speculation the government will speed up the process of relaxing controls on borrowing costs.
The People’s Bank of China withdrew a net 47 billion yuan ($7.7 billion) this week, after injecting 17 billion yuan last week. It suspended sales of 14-day reverse-repurchase agreements yesterday after conducting the operation for two weeks. The PBOC said in a Dec. 2 statement that financial institutions in a free trade zone in Shanghai will get priority in issuing large-denomination negotiable certificates of deposit.