PBoC Raises Rates in Market Ops, Marks 1st Net Withdrawal in 15 Wks

The People's Bank of China (PBoC) made the first net capital withdrawal from money markets since mid-November last year in its regular open market operations this week, financialnews.com.cn reported March 10. A total of RMB 205 billion in government paper is due to mature this week, according to the report. In fifteen consectuive weeks of net injections in its open market operations, the central bank returned a total of RMB 1.09 trillion to money markets, China Business News reported.

The PBoC issued RMB 32 billion in three-month bills at 2.7944% on Thursday, March 10, up from last week's 2.6314%, after the spread between offered rates and yields of the bills traded on the secondary market narrowed to almost nothing, according to the China Business News report. The central bank also offered RMB 72 billion in 2.8% 91-day repurchase agreements on Thursday, compared with a coupon of 2.63% in last week's offering. In its regular Tuesday issues, the PBoC issued RMB 1 billion in one-year notes at 2.9972%, unchanged from last week, and RMB 110 billion in 28-day repos at 2.5%.