China’s Yuan Effort Pushes Bank Funding Rate to Eight-Month High
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The People’s Bank of China’s support for the yuan is expected to keep banks’ funding pressure elevated in the next few weeks, as a liquidity crunch pushed a key gauge of their short-term borrowing to the highest level since June.
The yield of one-year AAA-rated negotiable certificates of deposit, funding instruments issued by banks, surpassed 2% this week, according to data compiled by Bloomberg. That’s a level widely watched by traders, and an eight-month high.