Swap rate drops to new low after cash injections
One-year interest-rate swaps in China declined to their lowest level in six weeks after the central bank added cash to the financial system after a report showed a drop in lending last month. The People’s Bank of China sold 30 billion yuan ($4.9 billion) of 14-day repurchase agreements on Thursday at 3.7 percent, according to a statement on its website. That indicates a net injection of 14 billion yuan in four days, after two weeks of withdrawals, data compiled by Bloomberg show. Aggregate financing, the broadest measure of credit, tumbled to 273.1 billion yuan last month from 1.97 trillion yuan in June, official data showed onWednesday. The cost of one-year swaps, the fixed payment needed to receive the floating seven-day repurchase rate, declined for a second day, losing three basis points to 3.61 percent in late afternoon trade in Shanghai, data compiled by Bloomberg show.