Latest News:  
Beijing   Thundershower/Overcast    28 / 22 ℃  City Forecast

Home>>China Business

Money market receives 50b yuan

By Wang Fei’er (Global Times)

08:42, July 11, 2012

The People's Bank of China (PBC) pumped another 50 billion yuan ($7.85 billion) into the interbank market through its seven-day reverse repurchase agreements at a bid rate of 3.3 percent Tuesday, following its injection of 225 billion yuan last week, the largest injection in six months, a move which experts told the Global Times is more about easing commercial lenders' capital shortfalls than helping the country's economy.

There will be a total of 100 billion yuan worth of capital drained from the interbank market this week, with 68 billion yuan worth of bills and repos and 168 billion yuan worth of reverse repo due to mature during the same period.

The PBC lowered its bid rate on the seven-day repos issued Tuesday by 50 basis points compared with the same agreements it issued on July 5, which carried a bid rate of 3.8 percent, due to cuts the central bank made to benchmark saving and lending rates last week and Beijing's general aim to allow commercial lenders to borrow government-injected money at a lower cost, Shi Lei, a senior analyst from Ping An Securities, told the Global Times.

"It's not unfair to say that the government's new cash injection into the money market and its bid rate cut are meant to show the country's efforts to shore up liquidity in the banking sector," said Guo Tianyong, director of the Research Center of China Banking at Central University of Finance and Economics.

Chinese commercial banks are also required to distribute annual dividends to stock investors around July, and many banks are worried this will add to their growing financial burdens, Shi said.

China's four major State-owned banks will pay a total of 215.97 billion yuan in stock dividends this year, Shanghai Securities News reported Tuesday.

Meanwhile, a shrinking net purchase of foreign exchange is another problem threatening banks' capital pools, Shi said.

Chinese commercial banks bought a total of $615.5 billion in foreign exchange and sold $582.5 billion in the first five months of this year, making a net purchase of $33 billion, well below the net purchase of $219.89 billion during the same period last year, according the State Administration of Foreign Exchange.

Email|Print|Comments(Editor:厉振羽、姚春)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Serene scenery in Tianshan Mountain,Xinjiang

  2. Pioneer in mask making of 2,000-year-old Nuo dance

  3. Troops conduct sea-crossing and landing combat drill

  4. Cantonese opera performed in Canada

Most Popular

Opinions

  1. No large stimulus needed
  2. ASEAN should stick to mediating role
  3. Diaoyu issue needs more than diplomacy
  4. China can help keep peace in growing Africa
  5. China can avoid hard landing
  6. US-Pakistan relations still tense after apology
  7. Preserve Arctic for sake of shared global future
  8. Owning a car a fading dream in China?
  9. Do not foment youngsters to protest
  10. All classes easy prey for marketing scammers

What's happening in China

Ancient footprints found in Anhui province

  1. Few seniors willing to move to nursing homes
  2. Ban on gay blood givers unnecessary
  3. Rate of wage hikes slows as does GDP
  4. New funds to open doors for yuan use
  5. China's publishing industry faces challenges

China Features

  1. Why is TCM worth of commendation?
  2. Arabians pay heavy price for Arab Spring
  3. Master of pasted-paper sculpture
  4. China, US hold mixed attitudes toward each other
  5. China does not lack capital: CSRC Chair

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai