China Money Rate Advances Most in a Month as PBOC Pulls Funds

China’s benchmark money-market rate climbed the most in more than a month, driven up by quarter-end demand and a withdrawal of funds by the central bank.

The monetary authority has drained a net 135 billion yuan ($21 billion) from the financial system so far this week, data compiled by Bloomberg show. Interbank borrowing costs tend to rise in the March-April period as lenders have to deposit tax Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term with the central bank, while commercial lenders hoard cash at the end of each quarter to meet regulatory checks.

The seven-day repurchase rate, a benchmark gauge of funding availability in the banking system, rose five basis points to 2.36 percent as of 11:56 a.m. in Shanghai, according to a weighted average from the National Interbank Funding Center. Early data showed the rate advanced to 2.56 percent. A daily fixing compiled by the center climbed 12 basis points to 2.40 percent.

“The PBOC has been draining funds in open-market operations in the past three days at a time when lenders need to prepare cash at the quarter-end to prepare for regulatory checks,” said Li Liuyang, Shanghai-based chief financial market analyst at Bank of Tokyo-Mitsubishi UFJ (China) Ltd. “This may be affecting sentiment somehow, and tightened the market a bit, but there’s no way the PBOC will let the market tighten much.”

To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net. To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Robin Ganguly, Allen Wan

By: Bloomberg News

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