PBOC Failure to Trim Shibor Flags Bank Reserve Cut: China Credit
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China’s policy makers face pressure to cut lenders’ reserve requirements as soon as this month after the first interest-rate reduction in two years failed to lower borrowing costs between banks.
The Shanghai one-month interbank offered rate, a gauge of funds banks have on hand to lend to each other, has added 15 basis points to 4.22 percent since Nov. 21, the day the one-year benchmark lending rate was decreased by 40 basis points. The rise in Shibor contrasts with a drop of 113 basis points in July 2012, the last time the policy rate was reduced.