Got a spare 5bn yuan?
If you do you can buy the rest of China’s Friday T-bill auctions because . . . no one else wanted them.
Here are the details via the Bloomberg:
In words, that means China failed to find enough buyers for the whole of the two auctions. For, according to some anonymous traders, the country’s finance ministry had planned on selling CNY 20bn worth of the 273-day bills and CNY15bn of the 91-day bills.
We’ve been in this T-bill territory before — most notably over the summer, with at least three auction failures. The lacklustre demand for China’s short-term debt was linked then to tightening of PRC monetary policy — or at least, the need for it.
Friday’s failures are being attributed to similar things.
From Bloomberg:
China’s central bank yesterday sold of three-year bills for the first time since June 2008, helping drain cash from the financial system. The sale of longer-maturity debt signaled policy makers are tightening monetary policy, reducing investor demand for shorter-dated government securities, said Chen Jianheng, an analyst in Beijing at China International Capital Corp.
“Fund availability won’t be as easy as before because the central bank has stepped up open-market operations to absorb money,” Chen said. “Investors were cautious because they expect the yields to rise.”
(H/T the effervescent Alea)
Related link:China T-bill auctions fall foul of rampant markets – Asia Money
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