China's money rates mixed, liquidity adequate
* 7-day repo rate up 3.84 bps to 3.3737 pct * Cash demand during month-end increasing dealer caution * Dealers expect fall in money rates due to fiscal deposits By Chen Yixin and Pete Sweeney SHANGHAI, Nov 30 (Reuters) - China's shortest overnight money rates edged down on Friday, but seven- and 14-day rates gained slightly as caution over month-end cash demand prevailed. Banks often keep more cash on hand at the end of each month in order to meet the regulatory loan-to-deposit ratio, currently standing at 75 percent, which is measured at month end. The benchmark weighted-average seven-day bond repurchase rate rose 3.84 basis points to 3.3737 percent from 3.3353 percent at the close on Thursday. The 14-day repo rate rose to 3.4973 percent from 3.4250 percent, and the one-day repo rate fell to 2.2649 percent from 2.3237 percent. Dealers expected rates to fall slightly in coming weeks as fiscal deposits are converted into base money, injecting cash into the system. A Reuters analysis shows that the Ministry of Finance is likely to pump a record-high 1.6 trillion yuan ($256.90 billion)into the system in the last two months of this year through the transfer of tax revenues out of the central bank and into commercial banks. In the bond market, interest rate swaps (IRS) were little changed on Friday, with one-year IRS dipping at 3.36 percent, from Thursday's close of 3.34 percent, while the benchmark five-year IRS inched up to 3.60 percent from 3.57 percent. In the past two weeks IRS rates jumped, showing that not only have investors given up on the prospect of interest rate cuts in the near term, they have little confidence that there will be more cuts forthcoming in 2013. Current Prev close Change (pct) (bps) 7-day repo 3.3737 3.3353 + 3.84 7-day SHIBOR 3.8256 3.8210 + 0.46 Note: Repo rate is weighted average. ($1 = 6.2281 Chinese yuan) (Editing by Kim Coghill)
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