25 Jun 2013
PBoC: Volatility in market liquidity is temporary
FXstreet.com (Barcelona) - Following the People Bank of China's statement yesterday, suggesting that there is “reasonable liquidity” in the country's banking system, Ling Tao, deputy director of the PBoC’s Shanghai branch said today during a press conference that China is prepared to keep interest rates at a healthy level and that the recent volatility is temporary.
“We’ll closely monitor the change of liquidity within the banking system going forward, flexibly adjust liquidity management based on international payments and the liquidity demand-and-supply situation,” Ling declared, adding that the PBoC is ready to“strengthen communications with market institutions, stabilize expectations and guide the market interest rates within reasonable ranges.”
Tim Davis, Rates and FX Research Global Strategist at TD Securities, comments: “The PBoC generally continues to sound none too concerned about recent developments but SHIBOR did reset lower for the third day in a row, down 75bps to 5.74% (13.44% on Thursday).”
“We’ll closely monitor the change of liquidity within the banking system going forward, flexibly adjust liquidity management based on international payments and the liquidity demand-and-supply situation,” Ling declared, adding that the PBoC is ready to“strengthen communications with market institutions, stabilize expectations and guide the market interest rates within reasonable ranges.”
Tim Davis, Rates and FX Research Global Strategist at TD Securities, comments: “The PBoC generally continues to sound none too concerned about recent developments but SHIBOR did reset lower for the third day in a row, down 75bps to 5.74% (13.44% on Thursday).”