China's money rates little changed despite fund drain
* 7-day repo rate almost flat at 2.9988 pct * C.bank drains 33 billion yuan via open market ops * C.bank lowers 14-day reverse repo rate to 3.45 pct By Chen Yixin and Pete Sweeney SHANGHAI, Sept 11 (Reuters) - China's money rates were little changed on Tuesday even as the People's Bank of China drained funds. China's central bank said it will be injecting 77 billion yuan ($12.15 billion) into the money markets through seven- and 14-day bond reverse repurchase agreements on Tuesday. But given a total of 110 billion yuan maturing in reverse repos, there will be a net drain of 33 billion yuan. The central bank set the seven-day reverse repo rate unchanged at 3.35 percent, while the 14-day rate was lowered to 3.45 percent from 3.5 percent on Monday. "The money supply is sufficient and so demand for seven-day repos is not very good," a dealer at a Chinese commercial bank in Shanghai said. "Capital prefers the lower-cost one-day repo rate, so the seven-day repo rate has only moved slightly." The central bank's seven-day reverse repo rate has influence over the secondary market's trading direction, traders said. "The money would have fallen below the 3 percent level a long time ago without the central bank's support for the seven-day reverse repo rate," said a dealer at a securities house in Beijing. The benchmark weighted-average seven-day bond repurchase rate fell 0.29 basis points to 2.9988 percent from 3.0017 percent at the close on Monday, but the shortest overnight one-day repo rate rose to 2.5110 percent from 2.3125 percent. The 14-day repo rate fell slightly to 3.1894 percent from 3.1923 percent, Dealers said they expected the cross-month 14-day repo rate to rise in coming days due to quarter-end factors and money demand ahead of the week-long National Day holiday period. Current Prev close Change (pct) (bps) 7-day repo 2.9988 3.0017 - 0.29 7-day SHIBOR 2.9973 3.0025 - 0.52 Note: Repo rate is weighted average. ($1 = 6.34 Chinese yuan) (Editing by Richard Borsuk)
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