by Ambrose Evans-Pritchard, The Telegraph:
Short-term rates plummeted in China after the central bank injected fresh liquidity to alleviate extreme stress in the money markets, but key borrowing costs remain worryingly high as the authorities try to rein in the world’s biggest credit bubble.
Seven-day ‘Shibor’ rates in Shanghai fell 265 basis points to 6.20pc, reversing the sharp spike over recent days caused as banks hoarded funds and built up buffers against potential defaults and counter-party losses.
The closely-watched 7-day repurchase rate fell by the most in almost three years to 5.55pc after the central bank added $4.8bn in liquidity early on Tuesday through open market operations.
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