I pointed out this morning that Chinese interbank markets have been tightening this week as SHIBOR and repo market rates rise on People’s bank of China (PBOC) liquidity drainage operations.
That activity has resumed today with a vengeance, sticking it up the analyst community that has hung its hat upon impending monetary stimulus. From MNI:
The People’s Bank of China doubled its net drain this week, tightening liquidity conditions in an effort to push up money rates.
The central bank drained CNY20 billion via 28 day repos and another CNY32 billion via 14-day repos on Thursday, traders said, an increase on last Thursday’s CNY26 billion drain.
This week, the PBOC soaked up a net CNY98 billion, doubling the CNY48 billion drain last week.
Traders said the ultra-loose interbank liquidity conditions pursued since the beginning of this year may have come to an end.
Since the beginning of the month not year. The PBOC is not loosening, peeps.
