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
- Capital outflows in June could resume
- End-of-quarter demand for cash
- Wealth-management products falling due … banks may have to hit the money markets for funds
- Government departments end of quarter draw-down of bank deposits
- 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.
