While the Fed’s decision to taper back its monthly asset purchase program to $75 billion has received a lot of attention, many have overlooked the news out of China.
The seven-day repurchase rate was up to a six-month high of 7.6% in Shanghai on Friday. It closed at 7.06% on Thursday. The People’s Bank of China [PBoC] injected money through short-term liquidity operations on Thursday.
We already saw a severe credit crunch in China back in June, and some are worried that we’re going to see a repeat of that.
Hedge fund manager Jim Chanos described this week’s run up in money market rates as “a bit of a banking crisis,” in a CNBC interview.
Read more: http://www.businessinsider.com/chinese-interest-rates-are-spiking-again-2013-12#ixzz2o0jVR5MD
