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PBOC Skips OMOs Friday; Drains Net CNY50 Billion

     BEIJING (MNI) - The People's Bank of China skipped its open market
operations on Friday for the second consecutive day, according to a statement on
the central bank's website.
     The PBOC said more fiscal expenditures toward the end of the month will
offset the impact of maturing reverse repos and local government's bond
payments, maintaining overall liquidity in the banking system at a relatively
high level.
     The result was a net drain of CNY50 billion for the day because a total of
CNY50 billion in reverse repos mature on Friday. 
     This week the PBOC has drained a net liquidity of CNY280 billion, compared
with the CNY330 billion drain last week. 
     The CFETS-ICAP money-market sentiment index ended at 42 on Thursday - down
from 45 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 2.7286%, much lower than
the 2.9303% 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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