The volume-weighted average rate of China’s benchmark overnight repo traded in the interbank market surged to 3.3278% at midday, its highest since March 2015, up about 28 basis points from previous close of 3.0487%. Official data showed that transactions of some overnight funds settled at a cost of 10%.
The interest rate for overnight tenor of the standing lending facility (SLF), which serves as a ceiling for the People’s Bank of China’s (PBOC) interest rate corridor, now stands at 3.05%.
The PBOC injected 98 billion yuan ($15.16 billion) on a net basis via open market operations earlier on Friday, snapping three straight days of net fund withdrawal.
It has drained most cash in three weeks by removing a net 470.5 billion yuan from the banking system this week.
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