China c.bank 3-month bill yield above forecast

SHANGHAI, July 2 - China's central bank auctioned 50 billion yuan of three-month bills in its regular open market operations on Thursday at a yield of 1.0279 percent, traders said, above expectations of about 0.9850 percent.

Traders had expected the central bank to allow the auction yield to rise about 2 basis points from last week's 0.9650 percent, following an uptrend in secondary market bill yields in recent weeks that was spurred by a resumption of initial public equity offers.

The three-month bill yield was at 0.9650 percent for 22 auctions in a row.

On Tuesday, the central bank drained 50 billion yuan via 28-day bond repurchase agreements at a 0.95 percent rate, up from 0.90 percent at its previous such operation, and drained 30 billion yuan via 91-day repos at a 1.0 percent rate, up from 0.96 percent.

Those were the first rate rises for such operations since November 2007.

Since a total of 161.5 billion yuan in central bank bills and repos will mature this week, the central bank is set to conduct a net injection of 31.5 billion yuan into the market for the week after it conducted a huge injection of 115 billion yuan last week. (Reporting by Steven Bian and Karen Yeung; Editing by Edmund Klamann)