Yesterday, the issuance interest rate of three-year central bank bills with bimetallic composite pipes rose sharply to 3%. However, as the interest rate level in the secondary market of these bills continued to climb, the inversion gap between the primary and secondary markets remained close to 50 basis points.
The People's Bank of China issued 10 billion yuan worth of three-year central bank bills in the open market on Thursday, resulting in a yield increase of 15 basis points compared to the previous issue, far exceeding the rise in this week's one-year central bank bills. However, the active increase in the primary market issuance interest rate did not result in a narrowing of the inversion gap between the primary and secondary markets.
Due to the central bank's announcement on Wednesday evening of a universal increase in banks' reserve requirement ratio, yields in the interbank spot bond market rose across the board yesterday. The secondary market yield for three-year central bank bills increased by another 13 basis points to 3.48%, keeping the inversion gap between the primary and secondary markets near 50 basis points.
On the same day, the issuance yield for three-month central bank bills also rose, but the increase was much lower than that of the three-year central bank bills, rising nearly 4 basis points to 1.8131%. At the same time, the central bank conducted a 91-day positive repurchase operation, with a repurchase volume of 4 billion yuan and a yield of 1.81%.
This week, the central bank withdrew a total of 97 billion yuan in funds. After offsetting the funds released due to maturity, it achieved a net withdrawal of 3 billion yuan, maintaining four consecutive weeks of net withdrawals.
Under the pressure of an impending comprehensive contraction of funds, funding price levels in the interbank repurchase market rose across the board yesterday. Some market traders indicated that although the overall funding situation has yet to show signs of tightness, concerns over the approximately 35 billion yuan in reserve payments next week potentially affecting supply and demand relations in the short term caused institutions to become significantly more cautious in their lending behavior.
The prices for overnight and seven-day funds rose by 0.5 and 4.91 basis points respectively yesterday, with trading volumes decreasing from the previous trading day.