PBOC Scrambles To Reliquify Chinese Interbank Market, Injects CNY 300 Billion Of Liquidity

Tyler Durden's picture

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Sudden Debt's picture

The looming week-long lunar New Year holiday is leading to a short-term shortage of liquidity as depositor demands for funds rise for travel and entertainment purposes.


Yeah... train tickets are expensive so it's logic that banks run out of liquidity if 50% of the population buys a train ticket for that week.

And when those chinese go on a buying spree and buy things like Crickets on a stick for their entertainment, one doesn't need to wonder why the systems starts to run dry...


eigenvalue's picture

Methinks a rate hike is coming this weekend or early next week.

Quinvarius's picture

I think you mean a rate lower, don't you?  It is obvious they went too far.

eigenvalue's picture

The interbank interest rates in China are set by the supply and demand. However, the interest rates on savings deposits and loans to the corporates are set by the PBoC. So there are actually two systems of interest rates in China. 

Quinvarius's picture

And it is clear they need to lower rates and reserve ratios to restore liquidity to the part of the banking system that has rates sets by supply and demand.  Liquidity is liquidity.  I said it when they tghtened the last two times.  Their velocity of money was already rolling over.  They never should have started on their end of last year campaign to tighten.  Their economy cannot handle it.  They need to loosen policy while letting the dollar fall. 

satansanus's picture

sell pops of fxi/hao for a while perhaps?

Oh regional Indian's picture

Reliquify. Liquidity. Very interesting words we use in finance.
Because I look around and in this fractal, self-reflective world, we've not done too well with our water resources, have we?
River were dam(n)ed and today the Nile, The Ganga, The Euphrates, The Yangtze are all dirty, toxic sewers. All the great rivers are. And Civilization grew on river-banks. Every one of them.
And then, we did it to the ocean. If bottom-fishing were not a telling enough syndrome of the hungry human, along comes the DeepWater Horizon.

Maybe something to think about.

Our inner liquidity is a sewer too, toxic cocktail...

And you cannot re-liquify the ocean or the great rivers...



Thomas's picture

OMG-Now even the Chinese, the last bastion of free enterprise, are turning to state capitalism.

topcallingtroll's picture

buwahaha.  JPM kill china now.  China stupid and buy high sell low.  They don't even know how to repo properly, or if they do they aren't showing it.  Ham fisted financial planners make Timmah and the Bernank look good in comparison.  Keep doing china with that big QE strap on BEN.  Don't stop until they promise to float.