The People's Bank of China (PBOC) yesterday issued two batches of central
bank bills totaling 102 billion yuan (US$14.3 billion), the latest attempt to
mop up excess liquidity.
The move was intended to maintain stable growth in the money supply and
steady market interest rates, the PBOC said.
The 78 billion yuan of three-year bills and the 24 billion yuan of
three-month bills were auctioned at yields of 4.56 percent and 3.4071 percent
respectively, flat from last week.
The bills were sold to primary dealers, such as commercial banks, securities
firms, insurance companies and other financial institutions approved by the
central bank.
On Feb. 14, the PBOC issued 195 billion yuan of central bank bills, the
largest one-day issue in nearly a year.
Analysts said that the huge bills issue sent the market a clear signal of
continued efforts to mop up excess liquidity.
M2, the broader measure of money supply, which covers cash in circulation
plus all deposits, rose 18.94 percent by the end of January, 2.22 percentage
points higher than a month earlier, the PBOC said earlier.
It also said that new Renminbi loans last month surged to a record high of
803.6 billion yuan, up 237.3 billion yuan from a year earlier.