SHANGHAI, May 3: China’s money rates rose on Friday after sinking for two consecutive days, but traders said liquidity was not an issue and rates remained in accomodative territory near 3 percent.
The unofficial benchmark weighted average seven-day repo stood at 3.2279 percent at midday, up from 2.9485 at close on Thursday.
The one-day or ‘overnight’ rate also rose to 3.0016 from 2.7975. The longer term 14-day rate rose more mildly to 3.0241, indicating expectations that money will be more ample in the future.
‘Actually the market is still pretty relaxed, and volatility is average,’ said a trader at a bank in Shanghai.
‘Upcoming regulatory escrow payments due next week might be having a slight impact, which is keeping the market from pushing rates lower.’
Markets digested a neutral move by the central bank during Thursday’s open-market operations, when the bank effectively canceled out the impact of maturing repos by issuing the exact same amount of fresh repos, resulting in a net injection of zero for the week.
Markets were only open for two days this week after a three-day holiday.
(AGENCIES)
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