China Asks Some Big Banks to Cap Rates on Short-Term Funding
- Banks were asked to cap short-term interbank rates last week
- Central bank has stepped up stimulus through lending facility
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China told a handful of nationwide lenders to cap interest rates on interbank funding, people familiar with the directive said, a move that dovetailed with a sizable cash injection intended to calm the market after last month’s unexpected liquidity crunch.
At least two national banks were told last week by regulators to offer rates on one-year negotiable certificates of deposit at no higher than 2.57%, the people said, asking not to be identified discussing private information. On Thursday, the PrimeNCD rate, an index measuring primary issuance rates on CDs of major commercial banks, was in line with that level at around 2.57%, according to National Interbank Funding Center’s website.