China cash squeeze persists even after central bank reassures market

China’s cash market squeeze showed little sign of easing on Monday, reinforcing the view the central bank has shifted to tighter monetary policy. The central bank appears to be trying to force banks to curb risky lending practices in the shadow banking system amid rising concerns about excessive debt. Rapid growth in the world’s second-largest economy over the last four years has also fanned fears about a property market bubble. The central bank announced after market close on Friday that it had injected 300 billion yuan ($49.41 billion) via short-term liquidity operations from December 18 to 20.

    

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