Reuters logo
China money rates down sharply for the week after interest rate cut
May 15, 2015 / 8:18 AM / 3 years ago

China money rates down sharply for the week after interest rate cut

SHANGHAI, May 15 (Reuters) - Chinese money rates fell
sharply on the week, tracking one-year lending and deposit rates
down after the central bank's 25-basis-point cut to the
benchmark one-year lending rate on Sunday.       
    The benchmark seven-day repurchase agreement rate (repo) was
at 1.88 percent mid afternoon on Friday, on track for its lowest
close since 2010, before the beginning of the central bank's
last tightening cycle after the financial crisis.
    For the week, the benchmark seven-day repo was down 40 basis
points (bps), following a nine-point drop the week before.
    The 14-day repo was down 36 bps to 2.36 percent while the
one-day was down 35 bps to 1.04 percent.
    Money rates below 3 percent are generally considered
relatively loose by traders.
    Despite the recent large falls in interbank rates, analysts
continue to believe the central bank still has more work to do
to bring real borrowing costs down for many firms.
    "Interbank interest rates have come down from elevated
levels since late March, helped by PBOC's easing measures such
as RRR cuts and lower reverse repo rates," wrote Helen Qiao,
Chief Greater China Economist at Morgan Stanley in a note on
Wednesday.
    "Despite two interest rate cuts in November 2014 and March
2015, enterprises' borrowing costs remained high in real terms,
due to entrenched PPI deflation."
    The People's Bank of China (PBOC) cut the one year lending
rate by a quarter percentage point on Sunday, following a 100-
basis-point cut to banks required reserve ratio on April 19, its
latest efforts to prop up lending and growth as the economy
slows.
    
 SHORT TERM RATES: 
 Instrument     RIC              Rate*    Change
                                          (weekly,
                                          bps)**
 1-day repo                         1.04         -35.73
 7-day repo                         1.88         -40.35
 14-day repo                        2.36          35.52
 7-day SHIBOR                       1.96         -37.20
   
*The volume-weighted average price (Vwap) at midday Friday
** Compared to the Vwap at market close the previous Friday
 
GOVERNMENT BOND FUTURES
 Contract       RIC       Rate*     Pct
                                    change
                                    (pct)
 Jun 2015                    97.77     0.15
 Sep 2015                    98.23    -0.51
 Dec 2015                    99.78     0.52
       
        >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    
    MARKET DRIVERS
    - China's Jiangsu province may delay April 23 debt auction -
sources 
    - China to relax rules for foreigners trading on interbank
market - sources 
    - China says local govt debt swap to cover over half of 2015
repayments 
    - China ready to cut rates again on fears of deflation
 
    - China cuts interest rates to spur growth, ease debt
pressure 
    - As China looks to ease policy, yuan may be set to fall
 
    - Lending relaxation to help stabilise market interest rates
 
    - As cash crunch anniversary looms, traders guess at c.bank
policy direction 
    - Tax man's attack on shadow banking startles markets
 
    - Beijing eases corporate debt rules to offset crackdown
 
    - China corporate financing squeezed as reform plans spark
rate spike 
    
    DATA POINTS
    - 
    - Fiscal deposits drive interbank liquidity trends GRAPHIC:
link.reuters.com/pem75t
    - Maturing central bank bills and repos upcoming GRAPHIC: r.reuters.com/vyr95t
    - Chinese government bond curve rises on rate reform
expectations GRAPHIC: link.reuters.com/jyr95t
    - China's interest-rate swap curve rises, flattens on
liquidity fears GRAPHIC: link.reuters.com/ryr95t
    - China corp bond spreads widen on risk aversion GRAPHIC: link.reuters.com/bas95t
  
    
   >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>   

($1 = 6.2164 Chinese yuan)

 (Reporting by Nathaniel Taplin; Editing by Shri Navaratnam)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below