CFETS 7-day repo rate set at 2.5278% vs 2.5480%

The Shanghai-based China Foreign Exchange Trading System (CFETS) fixed the reference rate yesterday morning for seven-day repurchase agreements at 2.5278% against 2.5480% the previous trading day.

Previously, the overnight repurchase rate was placed at 2.1915% against 2.2582%.

The repurchase rate is the discount rate at which the central bank repurchases government securities from the smaller commercial banks, depending on the level of money supply it decides to maintain in the country's monetary system.

The daily fixing of overnight and seven-day repurchase rates was initiated in March 2006 to provide a reference for derivatives such as interest rate forwards, swaps and short-term interest rate futures.

The rates, based on the median trading level from 9.00 to 11.00 am, are released daily at 11.00 am on the CFETS website (www.chinamoney.com.cn).

The China Foreign Exchange Trade System (CFETS), also known as the National Interbank Funding Center (the Center), is a sub-institution of the People's Bank of China (PBC), China's central bank.