SHANGHAI: Fears of a credit crunch in China’s banking system eased as short-term interest rates fell, and the central bank said there were sufficient funds in the market but banks needed to improve their cash management and control their lending.
The People’s Bank of China (PBOC) has engineered a tightening of cash in money markets as it tries to rein in excessive credit growth, especially in the lightly regulated “shadow banking” sector, seeing interest rates spike to 25% or higher for some deals late last week.
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