Swap rate drops to new low af­ter cash in­jec­tions

China Daily (Canada) - - BUSINESS -

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.

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