Cash Crunch sees China Money Rate Climb

China’s benchmark money-market rate rose and stocks dropped for a ninth day, the longest losing streak in 19 years, as targeted cash injections by the central bank failed to alleviate the worst cash crunch since June.

The seven-day repurchase rate, a gauge of funding availability in the banking system, increased 100 basis points to a six-month high of 7.60 percent in Shanghai, according to a daily fixing by the National Interbank Funding Center. It has jumped 328 basis points this week, the most since January 2011. Transactions had been reported at rates ranging from 3.80 percent to 9.5 percent as of 11:08 a.m. local time, with a weighted average of 7.76 percent. The Shanghai Composite Index (SHCOMP) of shares dropped 0.8 percent.

The People’s Bank of China conducted short-term liquidity operations recently, it said on its microblog yesterday, without giving details of the recipients, amount or rate charged for the financing. The monetary authority injected 200 billion yuan ($32.9 billion), online financial news provider Netease reported, citing a person it didn’t identify.

Bloomberg

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