China Investigates Liquidity Squeeze That Spiked Short-Term Rates to 50%
- China regulators investigating liquidity crunch that sent short-term rates to 50% high
- Regulators asking some institutions to explain borrowing at extremely high rates
- Liquidity stress blamed on government bond sales and month-end cash needs
- Authorities may have wanted to tighten liquidity to stem yuan weakness
- Regulators told institutions not to be "emotional" and to keep liquidity ample
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