SINGAPORE, Sept 25 — China’s benchmark money-market rate fell the most in a month after the central bank added funds to the financial system amid forecasts it will take further measures to revive Asia’s biggest economy.

The People’s Bank of China injected a net 40 billion yuan (RM27.4 billion) via open-market operations this week, after withdrawing 140 billion yuan last week. As Premier Li Keqiang’s growth target of about 7 per cent for this year is being challenged by a slowdown in manufacturing and exports, economists surveyed by Bloomberg see the monetary authority relaxing reserve requirements for banks again before year-end and cutting lending rates.

“Liquidity conditions in China are quite relaxed at this moment,” said Zhou Hao, a senior economist in Singapore at Commerzbank AG. “Everyone sees that China will continue to relax monetary policy.”

The seven-day repurchase rate fell eight basis points to close at 2.38 per cent in Shanghai and declined one basis point for the week, a weighted average from the National Interbank Funding Center shows. The cost of one-year interest-rate swaps, the fixed payment to receive the floating repo rate, dropped one basis point to 2.47 per cent, according to data compiled by Bloomberg.

Easing outlook

China has lowered interest rates five times since November in an attempt to revive an economy that’s expanding at the slowest pace since 1990. The PBOC has also cut the amount of cash lenders must set aside as reserves three times in 2015.

The central bank will probably reduce the reserve requirement for major banks to 17.5 per cent by the end of this year and 15.5 per cent by the end of 2016, from the current level of 18 per cent, according to the median estimates in Bloomberg’s survey. It will also lower the benchmark lending rate by another quarter of a percentage point in 2015, they predicted.

An estimated US$141.66 billion (RM620 billion) left China in August after the yuan’s surprise devaluation rattled global markets, exceeding the previous record of US$124.62 billion in July, data compiled by Bloomberg show.

China’s government bonds fell, with the 10-year yield rising one basis point to 3.33 per cent in Shanghai, according to Chinabond data. The yield declined one basis point this week. — Bloomberg