Shanghai interbank rate lowest since May - BBG

The Shanghai interbank rate fell to the lowest levels since May, despite PBOC’s last week cash withdrawal, as funds returned to the banking system following increased demand for quarter-end regulatory needs, Bloomberg reports.

Chen Ji, a Bank of Communications Co. analyst in Shanghai noted, “There’s ample liquidity in the banking system, as falling money rates indicate funds are returning.” 

The three-month Shanghai Interbank Offered Rate fell one basis point to a seven-week low of 2.93% on Monday, as the PBOC pulled cash for a seventh day via open-market operations (OMOs).

The PBOC drained a net 645 billion yuan ($96 billion) last week, wiping-out all the cash it had injected to meet quarter-end demand.