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PBOC Injections Fails To Contain Repo Rates

CHINA RATES

The PBOC once again conducted OMO's to the tune of CNY 20bn net injections, after not adding liquidity to the system since March the PBOC has now injected CNY 100bn in total over the past five sessions. Despite the injections repo rates have jumped, the 7-day repo rate is up 67bps at 3.60%, there is talk that commercial lenders are hoarding cash heading into quarter end due to regulatory checks. This is the highest level for the 7-day repo rate since the pre-LNY spike. Overnight repo rate is also higher, last up at 2.14% though moves not as dramatic.

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