Beijing, March 31 (IANS) The Chinese central bank on Thursday injected liquidity of $15.4 billion into its financial system to boost lending.
The People’s Bank of China (PBOC) carried out the operation through seven-day reverse repurchase agreements, or repos, at an interest rate of 2.25 percent, Xinhua news agency reported.
The reverse repo was priced to yield 2.25 percent, unchanged from Wednesday’s injection of 60 billion yuan, according to the PBOC. The injection has resulted in a net 40 billion yuan being pumped into the market Thursday, offset by 60 billion yuan in maturing reverse repos.
The move follows a week-long rise in money-market rates as maturing reverse repos continued to drain liquidity from the market while commercial lenders hoard cash to meet quarter-end regulatory reserves.
In Thursday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, climbed by 1.3 basis points to 2.017 percent, the highest level in a month.
Shibor for two-week loans rose the most, by 5.8 basis points to 2.788 percent.