China: Second cash crunch coming? This seems rather speculative, so I am uncertain about how much attention to give it. But I’m positing it, it may well be useful – comments welcome. The Wall Street Journal (ungated) asks if the cash crunch we saw in June in China could be repeated in September: The causes of the June cash crunch that pushed short-term borrowing rates close to 30%, triggering a sell-off in the mainland’s equity and bond markets, were complex. But analysts break it down into five main factors. Some of them look set to return. The Journal highlights these 5 factors that could lead to a September cash crunch 1.Capital outflows in June could resume 2.End-of-quarter demand for cash 3.Wealth-management products falling due … banks may have to hit the money markets for funds 4.Government departments end of quarter draw-down of bank deposits 5.Actions of the big banks More details of the 5 points at the link (ps. the article is a few days old). Another liquidity scare in China would weigh on the AUD, but whether or not we see it September … I dunno.
Posted on: Sat, 07 Sep 2013 03:41:53 +0000