Money-market rate zooms to 19-month high

SHANGHAI - China's money-market rate rose to a 19-month high as Bank of China Ltd (BOC) started selling convertible bonds on Wednesday, boosting demand for capital in the financial system.

The nation's third largest lender by market value plans to raise 40 billion yuan ($5.9 billion) in the sale, according to a statement published on May 30. China's finance ministry sold 28 billion yuan of three-year bonds on Wednesday, drawing bids for 1.48 times the amount on offer, down from 1.61 times at the last auction on March 17, according to traders at Agricultural Bank of China and China Postal Savings Bank.

"The BOC's convertible debt sale, which is the largest ever, is draining capital from the market," said Chen Liang, a fixed-income analyst at Guohai Securities Co in Shenzhen. "The sale may lock up 600 to 700 billion yuan of capital."