China’s benchmark money-market rate jumped the most in a week on speculation the central bank will lift banks’ reserve-requirement ratios to help curb inflation.
The People’s Bank of China has ordered lenders to set aside more funds as reserves four times since October in an effort to drain liquidity from the financial system. Consumer prices increased 4.9 percent in January from a year earlier, exceeding policy makers 4 percent inflation ceiling for a fourth month, data showed this week.
"There’s fear of a possible reserve-requirement hike very soon,” said Pin Ru Tan, a Singapore-based strategist at Royal Bank of Scotland Group Plc.
The seven-day repurchase rate, a gauge of the availability of funds, rose 34 basis points to 2.93 percent, according to a daily fixing from the National Interbank Funding Center published at 11 a.m. in Shanghai. That’s the biggest increase since Feb. 9. A basis point is 0.01 percentage point.
The one-year interest-rate swap, the fixed cost needed to receive the floating seven-day repurchase rate, was unchanged at 3.84 percent.
The People’s Bank of China pumped 55 billion yuan ($8.4 billion) into the financial system in the past week, less than the 78 billion yuan of funds injected through open-market operations the previous week, according to data compiled by Bloomberg. The central bank today sold 10 billion yuan of three- month bills, keeping the yield on the securities unchanged at 2.6242 percent.
The yield on the government’s 3.77 percent bond due December 2020 was unchanged at 4.05 percent, according to Chinabond, the nation’s biggest debt-clearing house.
.jpg)
