, Columnist
China’s Glut, India’s Drought. Two Faces of Liquidity
Banks in two of Asia’s largest economies are not doing so well, but for very different reasons.
Liquidity drought.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
Lenders in the world’s two most-populous nations are having very different problems with monetary and fiscal taps. In China, creditors are drowning in cheap central-bank cash, but loan demand is muted. In India, banks are in the middle of their fastest expansion in a decade, but they’re parched for liquidity.
While the Chinese authorities’ struggle to stimulate the economy with 3 trillion yuan ($418 billion ) in long-term cash injections has the world’s attention, the Indian deficit — the widest since 2010 — is also beginning to worry investors.