The cost of interbank lending is the highest it has been since February, as Chinese banks scurry for cash to maintain capital ratios amid higher withdrawals before the weeklong National Day break, Bloomberg reported, citing traders. “Cash supply will get very tight during the last week of this month,” said Peng Hao, a bond analyst at Fudian Bankin Kunming, Yunnan province. “The crunch may start to ease on the last day when banks finish borrowing all the money they need.” The one-day repurchase rate, which guages the availability of interbank funding, was 4.39% at 4:40 p.m. yesterday in Shanghai, up 0.1%, according to data collected by the National Interbank Funding Center. The seven-day repo rate was at a four month high at 4.51%, rising 0.08%, according to a weighted average figure. The People’s Bank of China injected US$16 billion into the financial system last week to help satisfy demand.
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