China's Central Bank Pumps More Money Into Market

BEIJING, March 31 (Bernama) -- China's central bank has pumped more money into the market to ease a liquidity strain, Xinhua News Agency reported Thursday. The People's Bank of China (PBOC) conducted US$15.46 billion (100 billion yuan, US$1 = 6.47 yuan) of seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future. The reverse repo was priced to yield 2.25 per cent, unchanged from Wednesday's injection of US$6.18 billion (60 billion yuan), it quoted a statement from PBOC. PBOC said the injection resulted in a net 40 billion yuan being pumped into the market on Thursday, offset by 60 billion yuan in maturing reverse repos. The move follows a week-long rise in money-market rates as maturing reverse repos continued to drain liquidity from the market, while commercial lenders hoard cash to meet quarter-end regulatory reserves, it said. Today's interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, climbed by 1.3 basis points to 2.017 per cent, the highest level in a month. Shibor for two-week loans rose the most, by 5.8 basis points to 2.788 per cent. --BERNAMA