China gave a surprise reminder to bankers who have been swimming in a pool of cash for months that its liquidity boost is aimed at reviving the economy, not helping to support financial speculation.
As they withdrew cash from the banking system on Friday, policymakers said their support had already “fully” met the needs of financial institutions – a phrase they hadn't used in at least a year. While there is no sign that banks are desperate for cash, the move also underscores Beijing's frustration that its monetary stimulus has done more to fuel a recovery in the bond market than boost economic growth.
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