China Interest Rate Crisis Continues: 7-Day Interest Rate Doubles to 10% in One Week; China Bans Words “Cash Crunch”

globaleconomicanalysis.blogspot.com / Mike “Mish” Shedlock / Monday, December 23, 2013 3:21 AM
A “cash crunch” is on in China. But don’t call it that, because China banned use of the term last week.
The New York Times reports China Rates Approach Crisis Levels Despite Central Bank Measures.

 An exceptional bid by China’s central bank to curb soaring interest rates and relieve pressure on the financial system appeared to have come up short on Monday, as Chinese money market rates shrugged off the measure and continued to approach the crisis levels seen in June.
The central bank, the People’s Bank of China, said late Friday that it had provided more than 300 billion renminbi, or about $50 billion, in short-term funds to selected banks over a three-day period that week.
Rates continued to surge on Monday, however, in China’s money markets — a key source of short-term funding for commercial banks and also for financial institutions engaged in risky, off-balance-sheet shadow lending.

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