China Faces Liquidity Test as $151 Billion Set to Exit System
- Central bank refrained from reverse repos for a sixth day
- Painful periods ahead in deleveraging process: Commerzbank
Why Money Keeps Flowing Out of China
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China will face one of the biggest tests of its campaign to contain corporate leverage next week, with more than $151 billion set to leave the already stretched financial system.
Some 890 billion yuan ($129 billion) of reverse-repurchase agreements issued before the week-long Lunar New Year break to meet seasonal demand will start coming due from Monday. Add that to the 151.5 billion yuan of maturing loans to commercial banks and conditions could be tight if lenders haven’t hoarded enough cash, according to Commerzbank AG.