Liquidity Alert? China's Interbank Market Delays Close By 30 Minutes

A large Chinese bank in search of liquidity kept the interbank from closing on November 20. The Google Translation gives the gist of the situation.

21st CBH: 流动性警报?银行间市场交易罕见延时30分钟

21st Century Business Herald, there are always fluctuating financial side.

November 20, several commercial bank traders to 21st Century Business Herald reporters that day inter-bank Chinese market front office trading system latency 30 minutes, until 5:00 pm until the end.

A stock line bond traders introduced the afternoon funds face more intense, as the main state-owned financial transaction accusing him of making delayed until close to 4:54 pm when there is turnover.

In fact, the above transaction system latency phenomenon is rare. In general, the interbank bond market and end at 4:30 pm each day, and only in surface tension of funds, the bank did not flat funding positions, the bank raised the delay apply to continue to look for funding. According to this reporter to rough statistics, only in January 2012, in February there were two trading delay, in around 2013 in June, appeared more times by the end of December, it was nervous market funds face.

Fluctuations in the financial side, November 19 somewhat omen.

According to this reporter from a number of banking and financial markets department official informed that November 19, the offer price of multiple maturities Minsheng interbank lines up with other banks about 40BP. Minsheng Financial Markets Department, a branch of insiders, is particularly tense because of the financial side. However, the November 20, quoted back to normal levels.

Many industry insiders to the recent volatility in the financial side of the IPO due to the freezing of funds, as well as Hong Kong and Shanghai through open, fiscal tax year-end funding needs and other factors superimposed. November 19, the Shanghai Stock Exchange seven days of bond collateral repo fixing interest rates sharply GC007 jumped nearly 100 BP, to 5.515 percent.

According to SW Securities research report, IPO or recent negative factors disturbance where the financial side, the freezing of funds to purchase new shares next week peak will reach 1.5-1.6 trillion this year for the single largest IPO freeze the amount of funding.

November 20, the inter-bank market funds face also appears certain fluctuations. As of 2:30 pm, the inter-bank collateral repo market interest rates of all maturities rose varieties with varying degrees, including overnight R001,7-day varieties R007,14 day products rose 40BP R014 respectively, 2BP, 180BP to 3.00%, 3.22% and 5.00%.

Correspondingly, November 20, Shanghai Interbank Offered Rate (shibor) each shorter maturities were also slightly higher, including overnight, 7 days, 14 days were up on shibor 3.50BP, 4.30BP, 4.40BP, But still in the 2.5390%, 3.1170%, 3.5620% of the low.

However, the head of a city bond trading firm, pointed out that the financial side fluctuate two days, you may continue into next week, but not to the capital and the whole situation is very tense. Regulatory authorities will normally take relevant measures, such as investment for short-term liquidity through SLO and other adjustment tool.

In fact, November 20, People's Bank of China in the open market to continue its 14-day repurchase, the scale is the first time in nearly two months fell to 10 billion yuan, the successful rate is flat at 3.40%.

According to newspaper reporter to statistics, since October 9 this year 14 days repurchase bid rate dropped from 3.50% to 3.40% since, "20 billion yuan 14 days repurchase, the successful rate of 3.40%," the same as the previous continuous operation of the 11 times.

Signal meaning that shrinkage repurchase after five weeks, the open market continued neutral hedging strategy, the amount of repurchase operations of similar size and maturity amount, a total of five weeks to achieve a zero-delivery / return, including Tuesday ( November 18) is also true. Due to shrinkage repo open market this week put 10 billion yuan into the net.

The central bank recently released "2014 China the third quarter monetary policy implementation report" that "continue to play a preset tuning function of open market operations, combined with the various stages of liquidity supply and demand reasonable grasp the intensity of open market operations and repurchase frequency, effective response to short-term fluctuations in liquidity caused by many factors. "shrinkage repurchase, corresponding fluctuations in the financial side recently.

However, since November 20, as well as 50 billion yuan treasury cash deposit expires, so this week the whole market, the actual total net return of 40 billion yuan.

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