China’s money-market rate fell, snapping a two-day gain, as the central bank stopped draining capital from the financial system.
The rate dropped to the lowest in three days after the People’s Bank of China sold 6 billion ($924 million) yuan of three-month bills at a yield of 2.9168 percent, the same rate as the last sale on April 21, according to a statement on the monetary authority’s website today. The central bank suspended repurchase operations today and has injected 67 billion yuan into the system so far this week, said Wee-Khoon Chong, a fixed- income strategist at Societe Generale SA in Hong Kong.
“The repo rate is down a bit because of a lack of liquidity draining by the PBOC,” Chong said. “The small size of PBOC bills sold” also contributed to the decline in the rate, he said.
The seven-day repurchase rate, which measures interbank funding availability, fell three basis points to 2.97 percent as of 11:07 a.m. in Shanghai, according to a weighted average rate compiled by the National Interbank Funding Center.
The one-year interest-rate swap, the fixed cost needed to receive the floating seven-day repurchase rate, was unchanged at 3.45 percent, according to data compiled by Bloomberg.
The yield on the 2.81 percent government bond due January 2012 rose one basis point, or 0.01 percentage point, to 2.76 percent, according to the Interbank Funding Center.
