China's seven-day repurchase rate has dived 3.44 percentage points to 5.4% after the People's Bank of China injected 29B yuan ($4.8B) into the money markets via regular open-market operations.
The benchmark rate had skied to 8.84% over the last five days due to the PBOC refraining from open-market activity since the start of December as part of its attempt to rein in soaring debt. Last week, the bank tried to relieve the credit squeeze with emergency provisions of cash, although to little effect until today.
"The PBOC won't change its neutral-to-tight monetary policy, but saving the market looks to be the only option now," says strategist Wei Fengchun.
The Shanghai Composite closed +0.15% and the Hang Seng +1.1%.