On October 29th, China central bank moved to ease cash crunch fears by injecting Rmb13bn to the economy for the first time since October 15th easing worries that the authorities were preparing to tighten monetary policy.
At the same time, the central bank raised the rate offered on the cash provided to the market. It set the rate for its seven-day bond reverse repurchase agreements at 4.1 per cent, up 20 basis points from the 3.9 per cent rate offered at all auctions since mid-August.
The provision of liquidity provided immediate relief to China’s money market. The weighted average seven-day repo rate edged down 1 basis point to 4.99 percent by midday, while the overnight repo rate fell 3 bps to 4.52 percent, although the 14-day rose 7 bps to 4.76 percent.
10/29/2013 8:54:34 AM