China’s central bank is flooding the country’s financial system with cash to prevent a shortage as demand for funds picks up before the Lunar New Year holidays.
The People’s Bank of China (PBOC) added 440 billion yuan (US$66.84 billion) using reverse-repurchase agreements, the most in three years, bringing net injections via its various lending tools this month to about 1.6 trillion yuan. The central bank plans to arrange 1.6 trillion yuan of short-term funds and as much as 800 billion yuan of medium-term liquidity support, according to the transcript of a PBOC meeting posted on Sina.com on Friday last week.
Policymakers are trying to keep borrowing costs low to support economic growth while keeping the exchange rate stable at a time of record outflows. The overnight money rate climbed to a nine-month high last week before the Lunar New Year holidays that start in the second week of February. The central bank is seen to be reluctant to use measures such as cutting lenders’ reserve-requirement ratios to avoid adding pressure on the currency to weaken.
“The PBOC remains reluctant to conduct system-wide easing, such as RRR [required rate of return] cuts across the board, on the back of depreciation concerns and huge new loans in the first of couple weeks of the year,” Standard Chartered PLC Hong Kong-based strategist Becky Liu (劉潔) said. “The large amount of cash shows its firm determination to maintain accommodative money-market conditions, and to use short-term tools to boost liquidity.”
The overnight repo rate, a gauge of funding availability in the interbank market, fell for a fourth day, declining two basis points to 1.94 percent, a weighted average from the National Interbank Funding Center shows. It climbed to 2.18 percent on Wednesday last week — the highest since April.
The PBOC yesterday auctioned 360 billion yuan of 28-day reverse-repurchase agreements and 80 billion yuan of seven-day contracts. That is the biggest one-day offering since February 2013. The interest rates were unchanged at 2.6 percent and 2.25 percent, respectively.
The cost of one-year interest-rate swaps, the fixed payment to receive the floating seven-day repo rate, fell three basis points to 2.31 percent, data compiled by Bloomberg show. It touched 2.34 percent on Monday, the highest in almost three weeks.
The PBOC has added a net 905 billion yuan via open-market operations so far this month, and 612.5 billion yuan through its Medium-Term Lending Facility, data compiled by Bloomberg show. It also sold 80 billion yuan of treasury deposits on behalf of China’s Ministry of Finance last week, which also injects liquidity into the banking system.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last