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China's money-market rate jumped to the highest level in six weeks on speculation banks will hoard cash as they need to meet quarter-end capital requirements, Bloomberg reported Wednesday.
The Ministry of Finance sold at least 30 billion yuan ($4.7 billion) of 10-year bonds at an average yield of 3.3958 percent, according to a trader at a finance company that participates in government debt auctions. That compared with the median estimate of 3.40 percent in a Bloomberg survey. The central bank cut the benchmark lending rate by 25 basis points on June 8 to help boost lending and support growth.
"China's banks probably have extended a big amount of loans this month, so they need more capital to meet quarter-end loan-deposit ratio requirements," Bloomberg reported, citing Hu Hangyu, a bond analyst at Citic Securities Co, the nation's third-biggest brokerage by assets.
The seven-day repurchase rate, which measures interbank funding availability, increased 44 basis points to 3.45 percent as of 4:30 p.m. in Shanghai, according to a weighted average rate compiled by the National Interbank Funding Center. That was the highest level since May 9.