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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 Friday, saying liquidity in the banking system in general is at a
proper level.
     This resulted in a net drain of CNY10 billion for the day, as a total of
CNY10 billion in reverse repos mature on Friday. 
     The PBOC has drained a net CNY510 billion via OMOs this week as it skipped
open market operations today and each of the first three trading days of the
     The net drain is the highest in 10 months, compared with a net drain of
CNY40 billion last week. 
     On Wednesday, the PBOC injected CNY188 billion in one-year Medium-term
Lending Facility (MLFs) loans at an unchanged interest rate of 3.2%. The
operation did not add or drain liquidity, as a total of CNY188 billion in MLF
loans matured Wednesday.
     An additional CNY187 billion in MLF loans will mature on Dec. 16.
     The CFETS-ICAP money-market sentiment index ended at 44 on Thursday, up
from 42 at Wednesday's close. The lower the reading the better the liquidity
conditions in the interbank market.
     The benchmark seven-day repo average was last at 2.6646%, compared with
2.8051% on Thursday.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI BEIJING Bureau; +1 202-371-2121; email: