China rates climb again, PBoC likely to provide further SLOs

FXstreet.com (Bali) - China money market rates surged again on Monday, with the 7-day repo rates reaching a high of 9.8% vs 7.6% on Friday close, despite the recent SLOs (Short term Liquidity Operations) conducted by the PBoC to ease credit fears.

At this juncture, there is strong cash demand by bank, as they are required to meet year-end loan-to-deposit ratios. As noted by Sonali Desai, Analyst at IFR Markets, "the PBoC may have misjudged liquidity in opting to skip open market operations today."