SHANGHAI, March 24 (Reuters) - The People’s Bank of China (PBOC) lowered its guidance rate for the benchmark seven-day bond repurchase agreement on Tuesday, lowering the rate to 3.55 percent down from 3.65 percent the previous week, the bank announced through its website on Tuesday.
This is the third time the central bank has lowered the guidance interest rate for the instrument, considered the best indicator of short-term liquidity conditions in China, since it announced a cut to interest rates at the end of February.
The PBOC has been moving to ease tight lending conditions in China, which have remained stubbornly high after the spring festival holiday in late February, showing that easing measures to reserve requirement ratios and lending rates are failing to work their way into real lending rates.
The seven-day repo opened trade at 3.92 percent on Tuesday morning, down from a volume-weighted average of 4.0288 percent on Monday. The contract has been trading above 4 percent - considered indicative of mildly tight money conditions by traders - since Jan 29. (Reporting by Pete Sweeney; Editing by Eric Meijer)