The total turnover decreased slightly and the market rate fell a little

There were 20 trading days in January 2001. The interbank market traded 4068 deals with a total turnover of 560.577 billion yuan and average daily turnover of 28.029 billion yuan, which decreased by 8.44 per cent compared with last month. The market rates went down slightly compared to December 2001, among which the weighted average interest rate of interbank borrowing decreased by 1.00 per cent and that of repo market decreased by 0.26 per cent. The turnover of cash bond trading went up stably. The average daily turnover increased 8.49 per cent compared with last month.

Interbank borrowing rate first went up, then down, and the turnover of medium-term maturity increased sharply

The average daily volume decreased in January. The trading faded at the beginning of the month, and it became active since the middle of January, especially on January 16, 22, and 28 when the public initial offerings were held. The weighted interest rate presented a "U" shape in January. It touched a high of 2.518 at the beginning of the month, and fell to the lowest of 2.268 on January 25 and then rebounded again. It reflected that capital demand had increased because of Spring Festival.

The average daily turnover of short-term maturity decreased sharply. The turnover of overnight (IBO001) and 20-day fell down 45.62 per cent and 33.35 per cent, respectively, compared with last month. IBO only accounted for 9.43 per cent of the total turnover, 6.45 per cent lower than the 15.88 per cent of December 2001. But the 30-day and 60-day increased 291.82 per cent and 59.82 per cent, respectively, compared with last month. The focus of purchasing moved to the medium-term.

Repo rate fluctuated severely and daily turnover increased gradually

In January, repo rate fluctuated severely, with the highest at 2.149 at the beginning of the month and the lowest at 2.137 on January 25. It rebounded and closed at 2.140 at the end of the month, which reflected a significant increase of capital demand with the coming Spring Festival.

Like on the interbank funding market, the short-term maturity of repo also dropped drastically. 14-day and 21-day decreased 67.21 per cent and 71.61 per cent, respectively, compared with last month. But the 60-day increased 54.33 per cent and its proportion in the total turnover reached 2.41 per cent, higher than that of 21-day. There was no trading of the maturity beyond 120 days.

Stable increase in cash bond trading

Cash bond trading rose steadily. The average daily turnover increased 8.49 per cent compared with last month. Unlike dramatic intraday changes in the past, the cash bond trade kept a stable daily turnover in January. The turnovers of 11 days out of the 20 days were above 1 billion.

The weighted average yield was stable, floating between 2.500 and 3.5000. Because it is said that the rate would be cut down soon, demand still exceeded supply.

Institutional funding structure remained unchanged with active participation of foreign financial institutions

In January, the structure of the inter-institution capital flow was basically unchanged. Compared with December 2001, the volume decreased slightly and the net financing remained unchanged. The lending of securities firms increased obviously, and the borrowing of investment funds decreased by 86.95 per cent, which indicated that the sluggishness of the securities market had driven some fund back to the interbank market. Foreign financial institutions traded more actively in January with lending and borrowing several times more than that in December 2001, which manifested that after entering the WTO, they were preparing for active participation in the domestic interbank market.

(By Chen Lifeng)