China key money rates rises on worry over Minsheng Bank's bond

Fri Mar 15, 2013 1:22am EDT

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* Main 7-day repo rate jumps over 28 bps to 3.3754 pct
    * Market players remain concerned over Minsheng bank's bond

    By Chen Yixin and Pete Sweeney
    SHANGHAI, March 15 (Reuters) - China's key seven-day money
rates jumped on Friday due to worries over a money drain
resulting from China Minsheng Banking Corp's
  20 billion yuan ($3.22 billion) convertible
bond issue. 
    But dealers said money conditions should loosen again next
week as most financial institutions have received refunds from
overpayments of estimated reserve requirement ratios (RRR).
    "Liquidity is not tight. I am still lending money," said a
dealer at a Chinese commercial bank in Shanghai.
     The seven-day repo rate jumped 28.15 basis
points to 3.3754 percent at midday, and the overnight rate
 adjusted slightly upward to 2.0497 percent. The
14-day repo rate, dipped slightly by more than 1 basis points to
3.0746 percent.
    In the bond market, interest rate swaps (IRS) also fell
Friday. One-year IRS gained slightly to 2.23
percent, from Thursday's close of 3.22 percent, and the
benchmark five-year IRS rose to 3.64 percent from
3.62 percent.
    
                                 Current  Prev close  Change
                                       (pct)           (bps)  
7-day repo         3.3754     3.0939     +28.15
7-day SHIBOR           3.3905     3.0840     +30.65 
 Note: Repo rate is weighted average.

    
        >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    
    MARKET DRIVERS
    - Markets spin on liquidity switches 
    - More TSF, less loans in 2013 
    - Monetary policy to be neutral in 2013 
    
    DATA POINTS
    - External liquidity tracker: Open market operations and
fiscal deposits are the main sources of liquidity in recent
months GRAPHIC: r.reuters.com/das95t
    - Impact of maturing central bank bills and repos GRAPHIC: r.reuters.com/kas95t
    - China's interest-rate swap curve has steepened GRAPHIC: r.reuters.com/has95t
    - China's government bond yield curve has steepened GRAPHIC:
r.reuters.com/jas95t
    - China corporate bond spreads have narrowed slightly 
GRAPHIC: r.reuters.com/mas95t
    - Hot money tracker: Hot outflows may be reducing liquidity,
but the impact is small GRAPHIC: r.reuters.com/was95t
    
   >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>   

 (Editing by Kim Coghill)
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