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Money rate falls on fear of reverse-repo redemption

2012-12-06 16:08 China Daily     Web Editor: qindexing comment

China's money-market rate touched its lowest level in almost two weeks on Wednesday, on speculation a decline in the redemption of reverse-repurchase contracts will increase the cash supply.

Some 253 billion yuan ($41 billion) of reverse-repo agreements will mature this week, compared with 269 billion yuan last week, according to data from China Merchants Bank Co. "The seven-day repo is falling because the redemption of reverse repos is declining and the month-end effect is totally over," said Liu Junyu, a Shenzhen-based bond analyst at China Merchants Bank, the nation's sixth-biggest lender.

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