International Law

Central bank issues RMB102 billion in attempt to absorb excess liquidity

By China Briefing

The People’s Bank of China on Thursday issued two batches of central bank bills totaling RMB102 billion in its the latest attempt to clean up excess liquidity.

According to Xinhua, the move is intended to maintain stable growth in the money supply and steady market interest rates.

The bank auctioned off RMB78 billion of three-year bills and the RMB24 billion of three-month bills at yields of 4.56 percent and 3.4071 percent respectively, flat from last week.

The bills were sold to primary dealers, such as commercial banks, securities firms, insurance companies and other financial institutions approved by the central bank.
On Feb. 14, the PBOC issued RMB195 billion of central bank bills, the largest one-day issue in nearly a year.

Xinhua reported that new Renminbi loans surged to a record high of RMB803.6 billion last month, up RMB237.3 billion from a year earlier.

Full post as published by China Briefing Blog on February 22, 2008 (boomark / email).