Money rate rises as banks hoard funds

China’s benchmark money-market rate rose to the highest level since February 23 on speculation that banks are hoarding funds to meet capital requirements at the end of the quarter, Bloomberg reported. An unnamed trader said the People’s Bank of China did not gauge demand for bill sales and asked banks to submit orders for 28- and 91-day repurchase contracts on Monday. The seven-day repurchase rate, a measure of interbank funding availability, climbed 33 basis points to 3.30% as of 4:53 pm in Shanghai on Monday, according to data from the National Interbank Funding Center. The yield on 3.99% government bonds due June 2021 was little changed at 3.53%, the center said. “Banks are still hoarding cash and are reluctant to lend,” said Frances Cheung, a Hong Kong-based strategist at Credit Agricole SA (ACA.EPA). The People’s Bank of China loosened reserve-requirement ratios last week for an additional 379 branches of Agricultural Bank of China (601288.SH, 1288.HKG), helping to ease liquidity shortage in rural areas.