Central bank pumps US$6 bln into money market
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China's central bank pumped 41 billion yuan (US$6 billion) into the money market this week through its open market operations, ending a four-week stretch of money tightening.
In its open market operations yesterday, the People's Bank of China sold 11 billion yuan of three-month bills at a yield of 1.5704 percent.
The three-month bill yield has been steady at 1.5704 percent since early June.
The central bank also conducted 70 billion yuan worth of 91-day repurchase agreement operations at a yield of 1.57 percent.
Offsetting the 166 billion yuan of bills and repurchase agreements that matured this week, the bank realized a net injection of 41 billion yuan into the market with new bill issues and repurchase agreements in its open market operations yesterday and on Tuesday.
The bank auctioned 44 billion yuan of one-year bills in its regular open market operations on Tuesday at a yield of 2.0929 percent.
Analysts said the shift by the central bank from money absorption to injection in the open market operations indicated a fine tuning of monetary policy.
The money market was slightly tighter with the initial public offering by the China Everbright Bank, which raised US$3.2 billion in the country's second-largest listing of the year.
"The central bank has used the monetary policy instrument in a much more balanced way since July," said Jiang Feng, an analyst at Shanghai Oriental Wealth and Securities Institute.
Jiang said the bank was changing its pace between money absorption and injection more frequently, as compared with one-sided tightening in the past.
The bank had drained a total of 250 billion yuan from the market over the four weeks since July 20.
