The PBOC engineered a liquidity crisis over the past couple of weeks to warn financial institutions, especially those in the so-called banking system, to rein in their speculative activities. Today, the Chinese central bank backed off and eased credit conditions, saying that it will guide interbank interest rates to reasonable levels.
According to an article in Bloomberg, this statement was published on the PBOC’s website today, but dated June 17. Furthermore, Bloomberg reported:
According to an article in Bloomberg, this statement was published on the PBOC’s website today, but dated June 17. Furthermore, Bloomberg reported:
Today’s PBOC statement adds to a commentary yesterday by the state-run Xinhua News Agency that said China isn’t suffering from a cash shortage and that money isn’t showing up in the right places. Banks, stock markets and small businesses are in need of funds, while investment in wealth-management products and shadow banking show money supply is plentiful, Xinhua said.
The central bank suggested in a separate statement yesterday that it wouldn’t rule out the idea of loosening credit. The nation should “appropriately fine-tune” its policies, according to a statement that summarized the monetary policy committee’s second-quarter meeting in Beijing. It was the first time since September that the panel, led by Governor Zhou Xiaochuan, has used the “fine-tune” phrase.
The central bank suggested in a separate statement yesterday that it wouldn’t rule out the idea of loosening credit. The nation should “appropriately fine-tune” its policies, according to a statement that summarized the monetary policy committee’s second-quarter meeting in Beijing. It was the first time since September that the panel, led by Governor Zhou Xiaochuan, has used the “fine-tune” phrase.
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