China’s overnight money-market rate climbed by the most in eight weeks as banks hoarded funds to meet quarter-end regulatory requirements.
The People’s Bank of China withdrew 18 billion yuan ($2.9 billion) from the banking system today via 28-day repurchase agreements at a 4 percent yield, according to a statement on its website. Funds will flow back into the market through 20 billion yuan of the contracts maturing today and 10 billion yuan due on June 26, data compiled by Bloomberg show. Banks typically boost cash holdings before reporting their financial positions to regulators at the end of each quarter.
The overnight repo rate, a gauge of interbank funding availability, jumped 23 basis points, the most since April 29, to 3 percent in Shanghai, according to a daily fixing from the National Interbank Funding Center. That is the highest level since April 3 and compares with 12.85 percent reached during a record cash crunch in June 2013. The seven-day repo rate was steady at 3.48 percent, the highest since May 4.
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Helen Sun, Bloomberg News via CHINA US Focus http://ift.tt/1qH6i6B
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