China Money Rate Drops as Reserve-Ratio Cut Mitigates Defaults
This article is for subscribers only.
China’s benchmark money-market rate declined to a 13-month low as improved cash availability after a cut in lenders’ reserve requirements offset defaults by two companies this week.
State-owned Baoding Tianwei Group Co. said Tuesday it won’t be able to pay 85.5 million yuan ($13.8 million) of bond interest, after Kaisa Group Holdings Ltd. on Monday failed to honor missed payments within a 30-day grace period. The People’s Bank of China lowered the amount of cash banks must set aside as reserves for the second time this year effective Monday. Australia & New Zealand Banking Group Ltd. estimates that will add 1.2 trillion yuan to the financial system.