2015-06-26

Hope For Central Bank Action in June Fades

Bloomberg: China Money Rate Advances for Fourth Week as Lenders Hoard Cash
China’s benchmark money-market rate climbed for the fourth week in a row as lenders held on to cash to meet official requirements and demand for funds surged due to municipal bond sales.

The shortage prompted the central bank to add money to the financial system by auctioning reverse-repurchase contracts for the first time in two months on Thursday. The People’s Bank of China didn’t pull funds this week and injected more than 30 billion yuan ($4.8 billion) to lenders in targeted reserve repos, according to separate people familiar with the matters. Money rates have risen every June in the past decade as lenders look to satisfy regulatory checks and companies pay tax.

Hellenic Shipping News: PBOC Cash Injection May Dim Hopes for Stronger Easing
The central bank’s move is meant to quench banks’ seasonal thirst for funds. But resorting to liquidity adjustments in the money market likely diminishes the chances of imminent, more-forceful monetary policy easing such as cutting banks’ reserve requirements, analysts say.

Some thing the window for a rate cut is still open because the central bank may want to act early in Q3 to spur the economy. iFeng: 时隔两月多央行重启逆回购 专家:近一两周仍是降准窗口

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