China's key money rate jumps on year-end supply concerns

China's key seven-day money rates jumped on Tuesday as financial institutions were reluctant to lend on concerns that supply could become tight around the year-end. Dealers said there was now ample liquidity in the market after the central bank injected funds via its open market operations but lingering caution pushed up money rates.
They expect the seven-day money rate to fall back in coming days but the 14-day tenor is likely to hover around relatively high levels as money demand could rise when reserve requirement payments are due on January 5. The benchmark weighted-average seven-day bond repurchase rate jumped 63.84 basis points to 3.7990 percent from 3.1606 percent at the close on Monday.