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Worst Cash Crunch Since June Signal of Economic Rebound

China’s brokerages are betting the biggest jump in money-market rates since June’s record cash crunch is a sign of strength in the nation’s economy rather than finance-industry weakness.

The central bank has refrained from injecting funds into the banking system since Oct. 17, driving the benchmark seven-day repurchase rate 138 basis points higher to 4.88 percent last week, the most in four months. Yet the one-year swap contract, the fixed payment needed to lock in the repo rate for 12 months, rose just 11 basis points to 4.08 percent, reflecting expectations for a gradual rise in borrowing costs. That’s well short of a 5.06 percent peak in June, when investors were concerned overstretched banks would default on payments.