China's key money rate jumps on year-end supply concerns

Mon Dec 24, 2012 11:47pm EST

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* 7-day repo rate jumps 63 bps to 3.7990 pct
    * Year-end factors impacting market -traders

    SHANGHAI, Dec 25 (Reuters) - China's key seven-day money
rates jumped on Tuesday as financial institutions were reluctant
to lend on concerns that supply could become tight around the
year-end.
    Dealers said there was now ample liquidity in the market
after the central bank injected funds via its open market
operations but lingering caution pushed up money rates.
    They expect the seven-day money rate to fall back in coming
days but the 14-day tenor is likely to hover around relatively
high levels as money demand could rise when reserve requirement
payments are due on Jan. 5.
    The benchmark weighted-average seven-day bond repurchase
rate jumped 63.84 basis points to 3.7990 percent
from 3.1606 percent at the close on Monday.
    The 14-day repo rate eased slightly to 4.3522
percent from 4.6129 percent, and the one-day repo rate
 fell to 2.2995 percent from 2.3034 percent.
    China's central bank injected 110 billion yuan ($17.65
billion) into the money markets through 28-day reverse bond
repurchase agreements on Tuesday. 
        
                                 Current  Prev close  Change
                                       (pct)           (bps)  
7-day repo         3.7990     3.1606    +63.84
7-day SHIBOR           3.8120     3.1790    +63.30
 Note: Repo rate is weighted average.
     
($1 = 6.23 Chinese yuan)

 (Reporting by Chen Yixin and Kazunori Takada; Editing by Edmund
Klamann)
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