China's central bank added a record 290 billion yuan ($46billion) to the financial system using reverse-repurchaseagreements, seeking to address a cash squeeze in the run-up to aweeklong holiday.
The People's Bank of China conducted 190 billion yuan of 28-dayreverse repos and offered 100 billion yuan of 14-day contracts,according to a trader at a primary dealer required to bid at theauctions. Today's total is the highest for a single day inBloomberg data going back to 2004.
“Record amounts of reverse repos are to meet the surge in cashdemand before the quarter-end and the holidays,” said Liu Junyu, abond analyst in Shenzhen at China Merchants Bank Co., the nation'ssixth-biggest lender. “As the central bank steps up adding fundsthrough reverse repos, it's unlikely to cut the reserve ratio thismonth.”
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