PBOC Drains Net CNY40 Billion In OMOs Wednesday

     BEIJING (MNI) - The People's Bank of China injected CNY100 billion in

seven-day reverse repos and CNY80 billion in 14-day reverse repos via

open-market operations Wednesday, Wind Information, a Shanghai-based financial

data provider, said.

     This resulted in a net drain of CNY40 billion for the day, as a total of

CNY220 billion in reverse repos mature. This was the third consecutive day this

week that the PBOC has drained liquidity from the interbank market. 

     The CFETS-ICAP money--market sentiment index ended at 50 on Tuesday - down

from 58 at Monday's close. The lower the reading the better the liquidity

conditions in the interbank market.

     Late Tuesday, the Ministry of Finance and the PBOC announced to roll over

special government bonds held by the People's Bank of China totaling CNY600

billion. The MOF will issue a total of CNY400 and CNY200 billion of seven-year

and 10-year government treasuries with yields of 3.6% and 3.62%, respectively,

to target banks on Aug. 29, rolling over the same amount in special government

treasuries that will mature on the same day.

     The MOF also said the PBOC will conduct open-market operations for those

target banks, according to a statement on its website late Tuesday. 

     The PBOC is expected to make an official announcement on its official

website about this morning's OMO around 9:45a.m., Beijing time.

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

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

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