Again from Bloomberg:

  • The People’s Bank of China has signalled that volatility in money market interest rates will persist
  • Borrowing costs will rise
  • This underscores the risk of defaults that could weigh on confidence and drag down growth

From a PBOC report on Saturday:

“When the valve of liquidity starts to tame and curb excessive credit expansion, money market rates, or the cost of liquidity, will reflect that”

“The market needs to tolerate reasonable rate changes so that rates can be effective in allocating resources and modifying the behaviour of market players.”

More at the South China Morning Post

Earlier reports out of China, here and here