The monetary authority sold reverse-repurchase agreements to add the cash, following three straight weeks of similar operations that injected a net 195 billion yuan. The PBOC added ¥450 billion in the two weeks before the holiday last year.
China’s central bank is injecting money as depositors in the world’s second-largest economy withdraw cash to pay for gifts and food before the weeklong holiday that starts on Feb. 18. Stock investors will place about ¥2.05 trillion of bids for IPOs this week, according to a Bloomberg survey of analysts.
“Funding demand due to IPOs is tightening liquidity,” said Wang Ming, chief operations officer at Shanghai Yaozhi Asset Management LLP.
The seven-day repurchase rate, a gauge of interbank funding availability, rose for the first time in four days, increasing four basis points to 4.37%, a weighted average from the National Interbank Funding Center shows.
The monetary authority sold ¥55 billion of 21-day reverse-repurchase agreements and ¥25 billion of 14-day contracts, it said in a statement on Tuesday. ¥35 billion of the agreements will mature, leaving a net addition of ¥45 billion so far this week.