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Central bank absorbs $295m from market this week

(Xinhua)
Updated: 2010-08-05 16:24

BEIJING - The People's Bank of China (PBOC), the central bank, auctioned 12 billion yuan ($1.77 billion) of three-month bills in its regular open market operations Thursday at a yield of 1.5704 percent.

The three-month bill yield has been steady at 1.5704 percent since early June.

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The central bank also conducted 91-day repurchase agreement operations on Thursday at a yield of 1.57 percent, taking 30 billion yuan ($4.43 billion) out of the money market.

The PBOC absorbed 2 billion yuan ($295 million) from the money stock this week. This came after the central bank's issuance of 60 billion yuan ($8.56 billion) of bills and repurchase agreements to offset those worth 58 billion yuan ($8.85 billion) that matured this week.

It was third straight week the PBOC has siphoned money from the market but the volume was down sharply from 84 billion yuan ($12.4 billion) last week and 81 billion yuan ($12 billion) the week before that.

A trader of a commercial bank in Shanghai said the money market remained quite loose. The repurchase agreements' weak interest rate indicated lenders had enough liquidity to buy those relatively low-yield assets from the central bank.