So the sudden spike in interbank lending rate in China surpassed 13 percent at one point. The seven-day repurchase rate hasn't risen this high in over 10 years. With the PBOC refusing to inject funds to the monetary market, will this liquidity squeeze hurt the government's efforts to restructure the economy by hurting certain sectors?
As I understand it, the main motive for the PBOC's credit tightening is to reduce highly leveraged lending. But doesn't this move sacrifice the needs of industries that the country is trying to develop? How will the banks deal with the cash squeeze?
Interested in hearing your thoughts.
Update: Asian stocks being hammered
Don't worry about it. It's all under control.
Don't worry they said, SHCOMP just crashed. Dropped the most since 2009.
the UK became the first G7 country to enter into a swap agreement with China. A 3-year, CNY200 bln (~$32.5 bln) swap agreement was announced over the weekend and is seen as a necessary step toward the London being an important offshore center for yuan and yuan-denominated instruments. A little more than a dozen other countries have swap lines with China.
PLEASE, do not worry.
Unless you're long Chinese rates, in which case you should definitely worry... In fact, you might want to panic or something like that.
Chinese astroturfing on WSO? You forgot to call us Comrades.
Bank Of China Declares Moratorium On Transfers, Online Banking; Counters Inoperable
http://www.zerohedge.com/news/2013-06-24/bank-china-declares-moratorium…
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