China’s Shibor hits 7-week high as PBOC drains funds

Bloomberg running a story on China’s Shanghai Interbank Offered Rate (Shibor) this Tuesday, noting that Yuan borrowing costs in Shanghai rose to a seven-week high as China’s central bank pulled funds from the financial system for the second day in a row, while the central bank drained most funds in six-months last week amid debt curb speculation.

Bloomberg report, “The one-month Shanghai Interbank Offered Rate climbed to 2.74 percent, the highest since Aug. 4, according to the National Interbank Funding Center. The fixing was released after the nation’s monetary authority drained a net 95.1 billion yuan ($14.3 billion) from the financial system, adding to Monday’s 245 billion yuan withdrawal that was the biggest in six months.”

“The four-week Shibor has advanced for the 10th consecutive day, the longest run of increases since June, amid signs that policy makers want to discourage the excessive use of borrowed money to buy assets such as bonds.“

Money-market rates are rising also before a week-long China holiday.