Opaque PBOC Fuels Transparency Call as Rates Swing: China Credit

China’s tightest credit conditions since a record cash crunch in June are prompting global investors to call for greater transparency from the central bank in the world’s second-largest economy.

The benchmark seven-day repurchase rate climbed 85 basis points to 5.05 percent in October, derailing a stock market rally and driving the one-year government bond yield to a record high. In June, the Shanghai Composite Index of shares sank 7.7 percent after the repo rate touched an all-time high of 10.77 percent. Then, as now, the People’s Bank of China said it was pursuing a “prudent” monetary policy even as it suspended cash injections into the banking system.