China Money Markets Face $411 Billion Crunch as Congress Nears
- Funds will be absorbed by maturing policy loans, bond sales
- Tight liquidity helps to keep yuan stable: Standard Chartered
China’s so-called Two Sessions — the annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference — are set to take place in Beijing next month.
Photographer: Qilai Shen/BloombergChina’s money markets are expected to see a liquidity withdrawal of more than 3 trillion yuan ($411 billion) over the remainder of this month, helping to keep funding costs elevated before key meetings of lawmakers in March.
The bulk of the liquidity drain will come from the 2.4 trillion yuan needed to pay back the maturities of so-called policy loans from the central bank. A further 820 billion yuan is expected to be absorbed by bond issuance from local governments, based on monthly estimates from brokerage Huachuang Securities and data compiled by Bloomberg.