Worsening Liquidity Situation Bites Interbank Market

(Beijing) – The liquidity shortage has worsened this week, affecting the interbank market, government bond underwriting and securities refinancing operations. But the central bank has shown no intention of pumping up money supply any time soon.

The overnight Shanghai Interbank Offered Rate (Shibor) rose by 578.4 basis points, a rare single-day jump, to 13.44 percent on June 20. All but one of its other rates also increased. So did the rates for interbank repurchase agreements.