China Money Rate Falls in Longest Run of Declines in Two Months

China’s benchmark money-market rate fell for a fifth day, the longest run of declines in more than two months, on speculation the central bank will ensure adequate funding availability to support the economy.

The nation’s development must maintain a certain growth rate, and the Communist Party will try hard to meet economic goals for the year through “targeted” steps, according to a statement yesterday on the government’s website that cited a Politburo meeting hosted by President Xi Jinping. China may take “heavy” measures in the second half to spur growth, according to a front-page commentary in the China Securities Journal.

The seven-day repurchase rate, a gauge of interbank funding availability, fell two basis points, or 0.02 percentage point, to 3.97 percent as of 4:36 p.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. The five-day drop is the longest since May 7.

“Interbank liquidity, overall, isn’t tight at the moment, and will probably remain so at least in the next couple of weeks,” said Li Haitao, a Shanghai-based fixed-income analyst at China Guangfa Bank Co. “The signals from the party meeting yesterday showed top policy makers will continue to prioritize growth, so targeted easing measures will probably persist.”

The cost of one-year interest-rate swaps, the fixed payment needed to receive the floating seven-day repo rate, rose two basis points to 3.87 percent, according to data compiled by Bloomberg.

The yield on the government’s 4 percent bonds due June 2024 climbed one basis point 4.31 percent, according to data from the National Interbank Funding Center.

— With assistance by Helen Sun

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