The People’s Bank of China said it had auctioned seven-day reverse-purchase agreements at 3.65%, down from 3.75% in addition to rolling over RMB350 billion (US$750 billion) of loans extended to banks in December in an attempt to boost liquidity, with the cost of one-year swaps falling Tuesday to 6.63%, Bloomberg reported, citing the bank and an unnamed source. Premier Li Keqiang has promised to protect job creation, a pledge complicated by capital outflows. “The lower rate on reverse repos has given the market some comfort,” said Frances Cheung, head of Asia ex-Japan rates strategy for Societe Generale SA in Hong Kong.
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