By Chen Yixin and Pete Sweeney
SHANGHAI, July 12 (Reuters) - China's money rates were
little changed on Friday, with traders expecting the People's
Bank of China to keep funds slightly tighter while it mops up
excess credit and considers interest rate reform.
'Next week, a total of around 200 billion yuan funds will be
injected by maturing instruments, so we watching to see whether
the central bank resumes open market operations or not, which
could give us some hint of its attitude,' said a dealer at a
Chinese commercial bank in Shanghai.
Maturing central bank bills will inject a net 160 billion
yuan ($26.08 billion) into the interbank market next week.
In addition, China's finance ministry will auction 50
billion yuan of three-month deposits to commercial banks on July
18, which will inject more cash.
Dealers said the market still faces strong upward pressure
due to funds draining to meet upcoming corporate tax payments,
which they said could cause 400 billion yuan ($65.21 billion) to
flow out of the banking system in July.
'I think the market confidence is hurt by the central bank's
tough attitude at the end of last month, so we are very cautious
about lending money,' said a dealer at a commercial bank in
The benchmark weighted-average seven-day bond repurchase
rate slipped 2 basis points (bps) to 3.81 percent
by midday, down from Thursday's 3.83 percent.
The overnight repo rate dropped 6 bps to 3.30
percent, while the 14-day repo rate edged up by 2
bps to 3.94 percent.
China's interest rate swap (IRS) curves flattened on Friday,
indicating little expectation of any policy easing in the near
term, despite the fact that Chinese equity markets rallied on
Thursday on hopes that weak export figures in June would force
regulators to loosen policy.
The one-year IRS rate inched up 1 bps to 3.89
percent, while five-year IRS rose 5 bps to 3.96
Current Prev close Change
7-day repo 3.8073 3.8311 -2.38
7-day SHIBOR 3.8000 3.8100 -1.00
Note: Repo rate is weighted average.
- CHINA MONEY-Tighter interbank regulation seen after cash
- Collapse in China bond volumes exposes market's seamy side
- China reform push means June turmoil may be just the
- External liquidity tracker: Collapse in FX purchases
hurts liquidity in May http://link.reuters.com/pem75t
- Impact of maturing central bank bills and repos GRAPHIC: http://link.reuters.com/pem75t
- Chinese government bond curve flattens on liquidity
squeeze, growth concerns GRAPHIC: http://link.reuters.com/jyr95t
- China's interest-rate swap curve is inverted on severe
liquidity squeeze GRAPHIC: http://link.reuters.com/ryr95t
- China corporate bond spreads have narrowed slightly
- Hot money tracker: Hot money inflows have returned in
2013, boosting liquidity GRAPHIC: http://link.reuters.com/saz74t
(Editing by Sanjeev Miglani)
((email@example.com)(+86 21 61041713)(Reuters
(China FX and money market guide: China debt market guide: SHIBOR rates: Reports on central bank open market operations: New Chinese debt issues: Prices for central bank bills, treasury bonds and sovereign bonds: Overview of China financial market data:)
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