18 billion yuan ($2.64 billion) of three
year bills in its open market operation on Thursday at a yield of 2.68 percent, flat from the last sale and within market expectations.
Traders had expected the People's Bank of China (PBOC) to let the yield come in unchanged or rise 2 basis points from last week's 2.68 percent because of a funding squeeze spurred by a public holiday from Monday to Wednesday.
The PBOC had let the three-year bill yield drop 7 bps during the period from early April through early June as investors shifted buying into longer-term bills from the short end due to their higher returns.
On Thursday, the PBOC also auctioned 5 billion yuan in one-year bills at 2.0929 percent, flat from last week and in line with market expectations.
The PBOC had allowed the one-year bill yield to climb 16 bps over the previous two weeks.
The PBOC typically auctions one-year bills every Tuesday, three-month bills every Thursday and three-year bills every other Thursday, but it altered its schedule for this week due to a public holiday this Monday to Wednesday.
Following is a summary of the volume of the central bank's bill sales and repo operations this week (billions of yuan):
Newly issued Maturing Net Injection
___________________________________________________________
Bills
Tuesday 0
Thursday 23
Repos
Tuesday 0
Thursday 0
Bills maturing 133
Repos maturing 80
____________________________________________________________
TOTAL 23 213 190
($1=6.832 Yuan)
(Reporting by Steven Bian and Karen Yeung; Editing by Edmund Klamann)
((karen.yeung@thomsonreuters.com; +86 21 6104 1783; Reuters Messaging: karen.yeung.reuters.com@reuters.net)) Keywords: CHINA OPENMARKET (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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