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PBOC Drains CNY130 Bln Fri; Cites Fiscal Spend, Tsy Deposits

     BEIJING (MNI) - The People's Bank of China skipped its open-market
operations Thursday, according to a statement on its website.
     This resulted in a net drain of CNY130 billion for the day, as a total of
CNY130 billion in reverse repos mature on Friday. 
     The PBOC has drain a net CNY330 billion in liquidity via its reverse repos
this week, compared with the CNY110 billion net injection last week.
     The central bank explained in a statement on its website that its inaction
was due to fact that liquidity was at an appropriate level given the impact of
government fiscal expenditures, the treasury cash deposits it made to banks on
Thursday, and withdrawals by financial institutions from the central bank funds
in excess of those required to meet their reserve requirement ratios. 
     The CFETS-ICAP money-market sentiment index ended at 40 on Thursday - down
from 51 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 2.6655%, compared with
2.9245% on Thursday. 
--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com
--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com
[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MN$MM$]

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