China injects $42 bn in money market to ease credit crunch
22 Jan 2014 1:04 AM GMT
The Chinese central bank pumped 255 billion yuan ($42 billion) into the money market on Tuesday easing concerns over financial risks in the world's second- largest economy.
The liquidity injection came after the Shanghai Composite Index fell below the much-watched 2,000 points level on Monday and to its lowest in six months.
A credit crunch in June pounded market sentiment and plunged the benchmark index downward by more than 5 per cent in one trading day. The reversed repo purchase, which had stopped for four weeks, brought down rates for the seven-day repo and the Shanghai Interbank Offered Rate that surged on Monday. The stock market rebounded 0.86 per cent on Tuesday. Analysts believe the cash crunches in June and December fortified the central bank’s intention to maintain liquidity and avoid sharp money rate rises.
The liquidity injection came after the Shanghai Composite Index fell below the much-watched 2,000 points level on Monday and to its lowest in six months.
A credit crunch in June pounded market sentiment and plunged the benchmark index downward by more than 5 per cent in one trading day. The reversed repo purchase, which had stopped for four weeks, brought down rates for the seven-day repo and the Shanghai Interbank Offered Rate that surged on Monday. The stock market rebounded 0.86 per cent on Tuesday. Analysts believe the cash crunches in June and December fortified the central bank’s intention to maintain liquidity and avoid sharp money rate rises.
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