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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

     BEIJING (MNI) - The People's Bank of China skipped its open-market
operations on Tuesday, saying that an increase in fiscal spending toward the
year-end that can hedge the impact of maturing reverse repos and that the
liquidity condition is still at a high level.
     This resulted in a net drain of CNY50 billion for the day, as a total of
CNY50 billion in reverse repos mature on Tuesday. It is the third consecutive
trading day that the PBOC skipped the OMOs. 
     The CFETS-ICAP money-market sentiment index ended at 45 on Monday, up from
43 at Friday's close, as the liquidity demand is increasing while approaching
the year end. The lower the reading the better the liquidity conditions in the
interbank market. 
     The benchmark seven-day repo average was last at 2.7428%, compared with
2.8192% on Monday.
--MNI Beijing Bureau; +86 (10) 8532 5998; email:
--MNI Beijing Bureau; +86 (10) 8532-5998; email: