Posted 11/27/2023, 7:02:00 AM
China Money Market Tightens Again Despite PBOC Liquidity Efforts
- Cash conditions in China's money market showed signs of tightness towards month-end as market participants grew cautious about demand and past liquidity squeeze
- Despite PBOC liquidity injections, borrowing costs for funds to help institutions tide over month-end remained high, especially for non-banks
- Benchmark 7-day repo rates hit 2.8%, highest since October 31st
- General sentiment cautious largely due to fears of another cash crunch like the October 31st incident
- PBOC injected 296 billion yuan through reverse repos over 3 straight sessions, but bank willingness to lend to peers still low