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China sells repos directly to select banks - sources
May 28, 2015 / 4:01 AM / 2 years ago

China sells repos directly to select banks - sources

SHANGHAI, May 28 (Reuters) - China’s central bank has sold bond repurchase agreements directly to select financial institutions in recent days, sources with direct knowledge of the matter told Reuters, implying that some banks now have cash to spare after a series of easing moves.

The central bank issued 7-day, 14-day, and 28-day forward repos to financial institutions at current market interest rates, the sources said, but did not give the amounts or name the specific banks.

The People’s Bank of China did not answer calls seeking comment.

Beijing has been steadily easing monetary policy, both lowering guidance rates and directly freeing up cash through reductions to bank reserve requirements, and the impact has shown up in the short-term money market, where the benchmark seven-day repo rate has slid below 2 percent.

Reporting by the Shanghai Newsroom; Writing by Pete Sweeney; Editing by Jacqueline Wong

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