China Money Rate Declines for Fifth Day as PBOC Stays Neutral

China’s benchmark money-market rate fell for a fifth day as the central bank extended a pause in open-market operations amid an abundant cash supply.

The People’s Bank of China didn’t sell any repurchase or reverse-repo contracts today, according to two traders at primary dealers required to bid at the auctions. The monetary authority last conducted such operations, which it normally does twice a week, on Nov. 25, data compiled by Bloomberg show. As much as 2.2 trillion yuan ($354 billion) may be locked up next week due to 20 initial public offerings, according to a report by Haitong Securities Co.

The seven-day repurchase rate, a gauge of interbank funding availability, dropped 11 basis points to 3.73 percent as of 4:24 p.m. in Shanghai, a weighted average from the National Interbank Funding Center shows. It touched 3.67 percent earlier, the lowest level since Dec. 17. The rate has fallen 123 basis points since the market re-opened on Jan. 4.

“There’s still ample liquidity in the interbank market,” said Frank Sun, an analyst at Shanghai CFETS-ICAP International Money Broking Co. in the city. “However, with a lot of IPOs coming next week, institutions have become more reluctant to lend. That may put some pressure on the market next week.”

The cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repo rate, was steady at 3.39 percent, according to data compiled by Bloomberg.

The yield on the government bonds due September 2024 rose one basis point, or 0.01 percentage point, to 3.65 percent, prices from the National Interbank Funding Center show.

— With assistance by Helen Sun

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