China Interbank Lending Rate Hits 9 Percent

China’s interbank lending rate has hit its highest level since June, despite regulators’ attempts to calm concerns over a potential cash crunch.

The seven-day repurchase rate rose to as much as 9% on Friday, even though China’s central bank made an emergency capital injection the day before.

The rate is a key gauge of how much is available in short-term funds for the country’s banks to lend to one another.

The turmoil caused China’s benchmark stock index to fall by more than 2%.

Chinese stocks have posted nine days of declines, amounting to their worst losing streak in nearly two decades.

Analysts say the rate rise also shows that China’s central bank, the People’s Bank of China (PBOC), is struggling to control rising negative market sentiment.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza