Speculation grows of early interest rate cut

The cost of locking in Chinese borrowing costs is poised to drop below the central bank's savings benchmark for the first time since 2012 as speculation mounts that interest rates will be cut.

China's one-year interest-rate swap dropped for a sixth day on Monday in the longest losing streak in six months on speculation the central bank will add more funds to the financial system.

The cost of one-year swaps, the fixed payment to receive the floating seven-day repurchase rate, had fallen to 3.025 percent by 4 pm in Shanghai, data compiled by Bloomberg showed. It was the longest run of declines since April, and the rate earlier touched 3.02 percent, the lowest level since September 2012.