The Central Bank of China has injected 10 billion yuan (about $ 1.54 billion) of repo to maintain ample liquidity in the banking system. The interest rate for seven-day repurchase agreements was set at 2.2 per cent. The Central Bank has decided to buy repurchase agreements from commercial banks with the intention of reselling them in the near future. The move signals criticality in the credit system, in view of the presentation of the results by 30 April.
A development framework to support
While the Chinese stock exchanges collected good performances with the CSI300 up 0.3% and the Shanghai Composite up by 0.2% followed by the positive ChiNext of 0.9%, despite the good stock market gains, therefore, Beijing intervenes on liquidity management.
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The stabilization of the stock market, in fact, is supported by earnings in start-ups with the consequent easing of concerns about liquidity as well as Beijing’s plans to stimulate domestic consumption.
However, the authorities have asked some banks not to penalize firms in difficulty as part of the support measures to stabilize cash flow and reduce the risk of financial contagion from the market.
The Huarong case, yet another postponement
The landscape is dotted with complicated cases, including China Huarong Asset Management. The fourth largest player on the wealth management scene in China said it will miss the April 30 deadline to submit 2020 earnings results because auditors need more time.