Free Trial

MNI: PBOC Drains Net CNY40 Billion Wednesday Via Skipping OMOs

     BEIJING (MNI) - The People's Bank of China skipped its open-market
operations on Wednesday, saying that an increase in fiscal spending toward the
year-end can hedge the impact of maturing reverse repos and that liquidity
conditions are still at a high level.
     This resulted in a net drain of CNY40 billion for the day, as a total of
CNY40 billion in reverse repos mature on Wednesday. It is the fourth consecutive
trading day that the PBOC skipped the OMOs.
     The PBOC has drained a net CNY210 billion from the interbank market so far
this week. Traders said the operation of the central bank has influenced the
market sentiment, particularly when the liquidity demand is increasing at the
year-end. 
     The CFETS-ICAP money-market sentiment index ended at 56 on Tuesday, up from
45 at Monday's close. The lower the reading the better the liquidity conditions
in the interbank market. 
     The benchmark seven-day repo average was last at 2.6650%, compared with
2.9317% on Tuesday.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI Beijing Bureau; +86 (10) 8532-5998; email: rich.dirks@marketnews.com
[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MN$MM$]

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.