Money market rate slides on bill sales uncertainty

Beijing China's money market rate dropped to the lowest level in a month on speculation the central bank will skip bill sales Thursday. The People's Bank of China didn't gauge demand yesterday for three-month securities due to be sold today, a sign it won't proceed with the auction, according to a trader at a primary dealer required to participate in the sale. The central bank has refrained from issuing three-month and one-year bills since December 22 and December 27, respectively. "There's limited space for money-market rates to decline further," said Wang Huane, a senior trader at Qilu Bank in Jinan, the capital of eastern Shandong province. The seven-day repurchase rate, which measures interbank funding availability, dropped 18 basis points to 3.48 per cent in Shanghai, according to a weighted average compiled by the National Interbank Funding Centre. It touched 3.2 per cent earlier, the lowest level since January 21, and fell 86 basis points in February. A total of 254 billion yuan (Dh147.95 billion) of central bank bills and repurchase contracts will mature this month, compared with 12 billion yuan in February, according to China Merchants Bank. From gulfnews