China's money rates steady, liquidity ample

Mon Dec 17, 2012 1:01am EST

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* Maturing reverse repos at 4-month low this week
    * Year-end cash demand remains strong

    By Chen Yixin and Pete Sweeney
    SHANGHAI, Dec 17 (Reuters) - China's money rates were little
changed on Monday, with traders expecting liquidity to remain
ample as the amount of maturing reverse repos draining funds
this week will fall sharply.
    This week, maturing central bank bond reverse repurchase
agreements will drain a net 102 billion yuan ($16.34 billion), 
down from last week's 262 billion yuan and the lowest level
since mid-August. 
    Dealers said they expected cash requirements over the
year-end could boost demand for 28-day reverse repos this week,
but added that the central bank was only likely to carry out
minor fine-tuning through open market operations.
    "The money situation is good. Demand is centred on the
year-end, so the appetite for 28-day reverse repos should be
strong this week," said a dealer at a Chinese commercial bank in
Shanghai.
    The benchmark weighted-average seven-day bond repurchase
rate inched up 2.50 basis points to 3.0263 percent
from 3.0013 percent at the close on Friday, when it jumped more
than 30 bps.
    The 14-day repo rate rose to 3.0736 percent
from 3.0355 percent, and the one-day repo rate was
almost flat at 2.2673 percent from 2.2654 percent.
    Dealers said the demand for key seven-day and 14-day repos
is still weak, meaning a small number of trades could cause a
sharp rise or fall at these tenors.
    
    
                                 Current  Prev close  Change
                                       (pct)           (bps)  
7-day repo         3.0263     3.0013    +2.50
7-day SHIBOR           3.0185     3.0000    +1.85  
 Note: Repo rate is weighted average.
    
    
      
($1 = 6.2415 Chinese yuan)

 (Editing by Richard Borsuk)
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