China vows to keep cash flowing

CHINA'S central bank says it will "adjust" liquidity to ensure stability after a week-long squeeze that has rattled financial markets.

The assurance from Zhou Xiaochuan, governor of the People's Bank of China (PBoC), on Friday helped Chinese share prices perk up after a recent sell-off that rippled across Asia and and around the world.

Anxiety about tightening credit has been spreading into the broader economy with some Chinese companies reportedly running short of cash to settle suppliers' bills.

But addressing a financial forum in Shanghai, Zhou said: "The PBoC will use all sorts of instruments and measures to adjust the overall liquidity level, so as to ensure the overall stability of the market."

For roughly three weeks, funds have been in short supply on China's interbank market, and the interest rates banks charge to lend to each other have surged to record highs.

The PBoC was said to be worried about a speculative boom in credit fuelled by low rates, but on Tuesday confirmed it had already offered liquidity "support" to banks and pledged to provide more if needed.

That statement marked an apparent change of course after the central bank earlier ruled out providing fresh funds and ordered banks to put their financial houses in order.

The comments on Tuesday came after Chinese stocks had closed at lows unseen since the global financial crisis in 2009.

Friday's new assurances helped the benchmark Shanghai Composite Index overcome opening losses to rise 0.78 per cent by midday.

But analysts said the PBoC would have to take more radical action for the market to rise more.

"Zhou's speech is in line with the central bank's earlier statement and the expectations of the market, so the impact is limited," Haitong Securities analyst Zhang Qi said.

Zhou remained confident about China's growth, though he acknowledged the economy had slowed.

"The Chinese economy, basically speaking, has kept stable growth," the central bank chief said.

"The growth rate has slowed down a little bit, but the growth rate is still in a reasonable range," he said, but gave no specific figure.

China has set its economic growth target at 7.5 per cent for 2013.

Anda sedang membaca artikel tentang

China vows to keep cash flowing

Dengan url

http://tempatistirahatan.blogspot.com/2013/06/china-vows-to-keep-cash-flowing.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

China vows to keep cash flowing

namun jangan lupa untuk meletakkan link

China vows to keep cash flowing

sebagai sumbernya