Save China Interest Rate Corridor
Theoretically, the ceiling to China's interest rate corridor is 7-day SLF rate, the floor being excess reserve rate. Excess reserve rate, however, has been keeping at 0.72% for a long while and it's not working as it should. So, the floor practically is OMO. The corridor and benchmark interest rate have yet to establish by the Chinese government. "The DR007 can better reflect the liquidity condition in the banking system and has an active role to cultivate the market base rate”. Although the PBC has not confirmed DR007 as the policy interest rate yet, it is closely watched by the market." -IMF
When interest rate rises, market liquidity reduces. When interest rate goes down, market liquidity increases.
Latest Stats
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SLF Interest Rate (7D)2022-073.10%
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DR0072022-08-081.29%
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China 7-day Shibor (CNY)2022-08-081.39%
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Reverse Repurchase Agreement (7D)2022-072.10%
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CN Excessive Reserve Interest Rate2022-060.35%
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