30 Jul 2013
Flash: Rise in money rates in China? – Deutsche Bank
FXstreet.com (New York) - There have been some renewed rumblings over the recent rise in money market rates in China, notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
Key quotes
“The VWAP of the 7-day bond repurchase agreement rate rose by a sharp 70bps yesterday to reach 5.11% after having risen 7 consecutive days prior to that. We understand this was partly due to month end effects as banks shore up their liquidity.”
“Indeed the rate has fallen overnight for the first time in over a week to 4.97%, probably helped by liquidity injections from the PBOC via a RMB17bn 7-day reverse repo.”
“This is the first time that the PBoC has conducted reverse repos since Chinese New Year in February.”
Key quotes
“The VWAP of the 7-day bond repurchase agreement rate rose by a sharp 70bps yesterday to reach 5.11% after having risen 7 consecutive days prior to that. We understand this was partly due to month end effects as banks shore up their liquidity.”
“Indeed the rate has fallen overnight for the first time in over a week to 4.97%, probably helped by liquidity injections from the PBOC via a RMB17bn 7-day reverse repo.”
“This is the first time that the PBoC has conducted reverse repos since Chinese New Year in February.”