China's money rates jump on strong holiday demand

* Benchmark 7-day repo rate jumps 32 bps to 3.70 pct
* Dealers cite tight money conditions due to holiday factor
* Central bank expected to inject more funds

By Chen Yixin and Pete Sweeney
SHANGHAI, Feb 6 (Reuters) - China's money rates jumped on
Wednesday, with dealers saying that liquidity remained tight as
banks kept cash in anticipation of a surge in withdrawals for
the week-long new year holiday.
"Today's money is tighter than before and demand exceeds
supply; even some of the big banks are not willing to lend
funds," said a dealer at a Chinese commercial bank in Shanghai.
But dealers said conditions may not tighten much more given
expectations the central bank will continue to inject additional
funds via reverse repos on Thursday, following a single-day
record injection of 450 billion yuan on Tuesday.
China's interbank market will be closed from Feb. 9 through
Feb. 17 for the Spring Festival holiday.
The benchmark weighted-average seven-day bond repurchase
rate jumped 32 basis points to 3.70 percent from
3.38 percent at the close on Tuesday.
The 14-day repo rate gained to 4.20 percent
from 4.06 percent, and the one-day repo rate
jumped to 3.61 percent from 3.26 percent.
In the bond market, interest rate swaps (IRS) were barely
changed on Wednesday. One-year IRS stood at 3.12
percent, down from Tuesday's close of 3.13 percent, while the
benchmark five-year IRS held steady at 3.74
percent.

Current Prev close Change
(pct) (bps)
7-day repo 3.7036 3.3768 +32.68
7-day SHIBOR 3.6960 3.3380 +35.80
Note: Repo rate is weighted average.

($1 = 6.23 Chinese yuan)

(Editing by Jacqueline Wong)