Thread: China Interbank Market Freezes As Overnight Repo Explodes To 25%

China Interbank Market Freezes As Overnight Repo Explodes To 25%



Submitted by Tyler Durden
06/19/2013 23:24 -0400

It seems liquidity (or counterparty mistrust) is beginning to reach extreme levels in China as the nation's banking system is now quoting overnight repo transactions at 25%. The explosion in funding costs echoes the collapse in trust (and surge in TED spread) among US banks in the run-up to the Lehman bankruptcy. MSCI Asia-Pac stocks are down over 3% with China's Shanghai Composite -2.5% at seven-month lows.
China's bond market is also collapsing:

Yield on 3.1% govt bonds due January 2016 jumps 39 bps to 3.749%, biggest rise since notes were issued in January

China this week...


US in the run-up to Lehman...


Charts: Bloomberg
Average:5

• hinese Interbank Liquidity Freeze Continues For Third Day, Will Persist As Inflation Expected To Rise Over 5.5%
• Following Doug Kass' Prediction Of A 25% Drop In Gold, Here Is How His Other Recent Forecasts Have Fared
• Nomura: US Downgrade May Cause Repo Market Liquidity Freeze
• PBOC Scrambles To Reliquify Chinese Interbank Market, Injects CNY 300 Billion Of Liquidity
• Ice-Nine Spreads To Shanghai: Chinese Interbank Liquidity Evaporates

http://www.zerohedge.com/news/2013-0...odes-25?page=2