Chinese repo rates jump as PBOC looks to fight inflation

|By:, SA News Editor

The People Bank of China has refrained from injecting liquidity into money markets for a third consecutive session, adding to concerns that it's clamping down on inflation, which hit 3.1% in September.

The PBOC's lack of action has meant that 58B yuan ($9.53B) has drained from the country's interbank market this week. And since the week of September 30, the PBOC has drained over 157B yuan.

In reaction, China's seven-day repurchase rate - a benchmark for short-term funds - rose 65 basis points, the biggest rise since July 29, to 4.67%.

Meanwhile, the city of Beijing is to impose further restrictions to try to cool the buoyant housing sector, although it's also going to try to increase supply for middle-income families.

The PBOC's actions helped Chinese stocks drop 0.8%.

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