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Liquidity weighs on Chinese markets, crunch unlikely 

June 6, 2017

Xinhua, China Daily

"Liquidity refers to the amount of capital available on the market, and how easily it can be used. The abundance of liquidity has wide implications on the stock, bond, housing and other markets.

"June is a cruel season for China's money market, with liquidity demand usually spiking on seasonal factors such as quarterly regulatory reviews, tax payments and the simple fear of a reoccurring liquidity crunch," said Zhao Yang, Nomura chief China economist.

A credit crunch at Chinese banks in June 2013 caused interbank interest rates to surge to double digits and pounded the stock market, sparking concern among investors and leaving them with a long-lasting memory."

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