Traders and treasurers in China have been spooked by a liquidity squeeze that has prompted unprecedented rises in interbank rates. While some sources attribute this to the traditional increase in demand for cash ahead of the Chinese New Year, as migrant workers withdraw money to take home to their families, the unusual severity of the squeeze has other sources saying that the Chinese authorities have badly mismanaged the situation.
The People’s Bank of China, the central bank, has been battling aggressively to control inflation in China, its primary weapon being increases in the reserve requirement ratios (RRR) – the amount of cash banks must hold.
Access intelligence that drives action
To unlock this research, enter your email to log in or enquire about access
