China Money Rate Drops to Six-Week Low

China’s benchmark money-market rate fell to the lowest level in six weeks after a central bank official signaled monetary policy was slanted toward easing.

Investors should realize that the economy is in “quasi-deflation” mode and a prudent monetary policy should focus on lowering funding costs, the China Securities Journal reported today, citing Xu Nuojin, deputy head of the statistics department at the People’s Bank of China. Growth will slow without sufficient investment, said Xu.

The seven-day repurchase rate, a gauge of interbank funding availability, dropped four basis points, or 0.04 percentage point, to 3.01 percent as of 10:52 a.m. in Shanghai, according to a weighted average from the National Interbank Funding Center. It reached 2.99 percent, the lowest level since May 6.

Bloomberg

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