PBOC Drains Net CNY20 Bln After Tsy Cash Deposits Today

     BEIJING (MNI) - The People's Bank of China skipped its open-market

operations Thursday, according to a statement on its website.

     The PBOC explained that it will make a total of CNY80 billion in treasury

cash deposits today to commercial banks and that the liquidity in the interbank

market is at a proper level, so it did not conduct OMOs today.

     A total of CNY100 billion in reverse repos mature Thursday, resulting in a

CNY20 billion drain after taking into account the treasury cash deposits. It is

the fourth consecutive day this week that the PBOC has drained liquidity from

the interbank market. 

     It is the fourth time this year that the PBOC has made cash deposits from

the treasury to commercial banks. The last time was last Friday, when the PBOC

and the Ministry of Finance deposited CNY80 billion at a rate of 4.46%. The

moves are part of a bid to improve the efficiency of cash management, according

to a statement on the PBOC's website on Monday.

     The CFETS-ICAP money-market sentiment index ended at 48 on Wednesday, down

from 50 at Tuesday's close. The lower the reading the better the liquidity

conditions in the interbank market.

     The benchmark seven-day repo average was last at 2.6800%, compared with

2.9104% on Wednesday.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: rich.dirks@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

[TOPICS: MMQPB$,M$A$$$,M$Q$$$,MN$MM$]