By just about any metric, the cost of money in China’s financial markets is eye-catchingly low.
Faced with a slowing economy and the risk of trade-war fallout, the People’s Bank of China has turned on the liquidity taps. To borrow yuan overnight in the onshore market, the annualized charge is 1.40 percent, the least since 2015. For smaller banks needing to sell negotiable certificates of deposit, yields are at record-lows. Currency forwards, interbank borrowing costs, government bonds and interest-rate swaps show a similar picture.
