China’s central bank issued a statement yesterday (25 June) helping explain its deliberate policy actions that resulted in a large lift in China’s inter-bank market interest rates (Shibor). The PBoC indicated the “tight liquidity situation will gradually ease.” The PBoC will continue to implement “prudent monetary policy” by attempting to slow total social financing (total credit growth). However, for lending in favour of China’s “national industrial policy and macroprudential requirements” the PBoC will “provide liquidity support”. The PBoC will also ensure that primary dealer liquidity and trading in the Shibor ... (full story)