Beijing China's money market rate dropped to the lowest level in a month on speculation the central bank will skip bill sales Thursday.
The People's Bank of China didn't gauge demand yesterday for three-month securities due to be sold today, a sign it won't proceed with the auction, according to a trader at a primary dealer required to participate in the sale. The central bank has refrained from issuing three-month and one-year bills since December 22 and December 27, respectively.
"There's limited space for money-market rates to decline further," said Wang Huane, a senior trader at Qilu Bank in Jinan, the capital of eastern Shandong province.
The seven-day repurchase rate, which measures interbank funding availability, dropped 18 basis points to 3.48 per cent in Shanghai, according to a weighted average compiled by the National Interbank Funding Centre.
It touched 3.2 per cent earlier, the lowest level since January 21, and fell 86 basis points in February.
A total of 254 billion yuan (Dh147.95 billion) of central bank bills and repurchase contracts will mature this month, compared with 12 billion yuan in February, according to China Merchants Bank.