Reuters on "Scramble for Cash"
Reuters writes "Scramble for Cash in U.S. Intensifies as Year-End Looms"." The article reads, "Cash hoarding by banks, securities dealers and asset managers in the United States is in full swing with signs that the year-end ritual might be more intense than years past. In the final weeks of every year, the demand for cash typically heightens as financial companies rush to assemble the money needed to bridge the period into the new year. This year, however, tighter bank regulations and heavy redemptions by investors from mutual and hedge funds have ratcheted up the urgency, analysts said.... Last week, money market mutual funds recorded a sixth straight week of inflows, bringing their assets to nearly $2.7 trillion, the highest since March, according to iMoneynet. In anticipation of this surge in demand for cash-like products, the Treasury Department raised its one-month bill offering on Tuesday and the Federal Reserve will introduce term reverse repurchase agreements (RPP) next Monday. Investors will choose among bank accounts and other ultra short-term products that earn some income even though most offer negligible interest because of the Fed's near zero rate policy. They will also consider investments they can easily move money in and out of in case of unexpected market volatility as most recently seen in mid-October. "It's more than just interest rates money fund managers are looking at right now. They are looking to be more proactive than recent years to manage their money at year-end. They are looking at investments with higher yields and/or longer maturities," said Alex Roever, head of U.S. interest rate strategy at J.P. Morgan Securities in New York." Also, Euronews writes, "China money market funds grow as foreign firms' 'trapped cash' freed up." The article says, "Rapid reforms by Beijing allowing foreign companies to move funds from their China operations across borders relatively freely is boosting treasurers' confidence in using the yuan as the preferred currency for doing business. That increased confidence has also helped China's fledgling money market funds industry as companies look to invest their cash in investment vehicles after years of parking funds in bank deposits which offered them next to nothing in terms of yield. For years, treasurers operating in China had to face the issue of "trapped cash": the inability to freely remit their funds to their regional treasury centres outside the mainland as the yuan was not freely convertible."
