Interest Rates Rise, but Analysts Say There'll Be No Repeat of June Liquidity Crunch

(Beijing) – Interest rates have risen lately, sparking fears of a liquidity crunch similar to the one that hit the interbank market in June, but analysts say the situation is unlikely to last.

Tighter supply drove up the overnight Shanghai Interbank Offered Rate (Shibor), the Chinese equivalent of London Interbank Offered Rate, to 4.088 percent on October 24, the highest level since July 2. The seven-day Shibor was 4.68 percent, also among the highest levels in nearly four months.