Chinese President Xi JinpingReuters/Pool
China’s bid to provide stimulus through increased bond issuance has led to a cash crunch, Bloomberg reported.
This week, banks issued a form of short-term debt at the highest volume on record.
Last week, some smaller lenders had to borrow short-term cash at a 50% rate.
China’s latest effort to support economic growth has unintentionally fueled a massive cash crunch, creating chaos in its financial markets, Bloomberg reported.
In a rare move, Beijing approved a mid-year budget adjustment last month that enabled the sale of $137 billion in sovereign bonds. The measure was meant to ease debt burdens on the country’s local governments and offer stimulus amid economic turmoil.
But the flood of bond sales, including those by local governments, soaked up a huge amount of liquidity, and onshore lenders have since rushed to counteract the crunch by scrambling to raise cash.
This week, banks issued a form of short-term debt at a record pace. Lenders have…
2023-11-10 21:37:09
Source from finance.yahoo.com
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