Fri January, 2021, Age: 3 years
The volume-weighted average rate of China’s benchmark “overnight repo” surged to 3.3278% from the previous close of 3.04% on the interbank market by midday, the highest it’s traded at since March 2015. This is a potential harbinger of a tighter money supply and follows on the heels of three straight days of net fund withdrawals of 470.5 billion yuan from China’s People’s Bank of China by the Chinese government. On Friday, the PBOC reversed course and injected 98 billion yuan back into the banking system. This was no enough to placate jittery market fears that China was tightening its money supply to forestall the possibility of mounting inflation.
