China Money Rates Climb, Stocks Slide Due to Cash Crunch
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China’s money-market rates surged and stocks dropped for a ninth day yesterday, the longest losing streak in 19 years, as targeted fund injections by the central bank failed to alleviate the worst cash crunch since June.
The seven-day repurchase rate, a gauge of liquidity in the financial system, increased 100 basis points to a six-month high of 7.6 percent in Shanghai, according to a daily fixing by the National Interbank Funding Center. It rose 328 basis points for the week, the most since January 2011. Transactions were recorded at rates ranging from 3.8 percent to 10 percent as of 4:17 p.m. yesterday local time, with a weighted average of 8.22 percent. The Shanghai Composite Index of shares slid 2 percent.