China’s
central bank on Friday in Beijing pumped more money into the market to ease
liquidity strain.
The People’s Bank of China (PBOC) conducted 16.9 billion dollars, of seven-day “The reverse repo’’ reverse repurchase agreements.
The People’s Bank of China (PBOC) conducted 16.9 billion dollars, of seven-day “The reverse repo’’ reverse repurchase agreements.
A statement by PBOC said that through this process,
the central bank would purchase securities from banks with an agreement to
resell them in the future.
The reverse repo, the largest single-day operation
this month, was priced to yield 2.25 per cent, unchanged from Thursday’s
injection of 40 billion yuan.
The move followed a week-long rise in money-market
rates as commercial lenders start to hoard cash to meet quarter-end regulatory
reserves.
In Friday’s interbank market, the benchmark
overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at
which Chinese banks lend to one another, climbed by 2 basis points to 1.99 per
cent, the highest level this month.
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