Liquidity tightness spurs fund injection
By Feng Jianmin |
January 30, 2013, Wednesday
|
Print Edition
Print Edition
CHINA yesterday injected more money in banks amid tightening liquidity ahead of the Spring Festival break.
The People's Bank of China pumped in 80 billion yuan (US$12.9 billion) through seven-day reverse repurchase contracts yesterday. The amount exceeded last 43 billion yuan last Tuesday and 58 billion yuan last Thursday.
But 53 billion yuan were withdrawn yesterday as reverse repurchase contracts matured, giving a net daily injection of 27 billion yuan.
The PBOC initiated the injection to ease a money strain as borrowing costs among banks jumped to a three-week high yesterday. China's financial markets will be shut from February 11 to 15 for the Spring Festival.
The benchmark interbank borrowing rate hit 3.0995 percent yesterday, the highest since January 8, according to the Shanghai Interbank Offered Rate.
"The liquidity pressure is building up as companies are due to pay taxes and banks start to prepare for cash payment before and during the holiday," Wang Chao, an analyst of China International Capital Corporation, said.
The People's Bank of China pumped in 80 billion yuan (US$12.9 billion) through seven-day reverse repurchase contracts yesterday. The amount exceeded last 43 billion yuan last Tuesday and 58 billion yuan last Thursday.
But 53 billion yuan were withdrawn yesterday as reverse repurchase contracts matured, giving a net daily injection of 27 billion yuan.
The PBOC initiated the injection to ease a money strain as borrowing costs among banks jumped to a three-week high yesterday. China's financial markets will be shut from February 11 to 15 for the Spring Festival.
The benchmark interbank borrowing rate hit 3.0995 percent yesterday, the highest since January 8, according to the Shanghai Interbank Offered Rate.
"The liquidity pressure is building up as companies are due to pay taxes and banks start to prepare for cash payment before and during the holiday," Wang Chao, an analyst of China International Capital Corporation, said.
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