China 3-month SHIBOR interbank rate at highest level since June crunch
SHANGHAI Dec 6 (Reuters) - China's three-month Shanghai Interbank Offered Rate leapt sharply to 5.1670 percent on Friday morning, the highest level the rate has been since China's central bank engineered a dramatic cash crunch in June.
However, short-term rates in the interbank market did not follow, with the benchmark seven-day bond repurchase contract remaining relatively flat, although elevated.
Hao Zhou, economist for ANZ Research in Shanghai, said the disconnect was due to speculation that the SHIBOR would be used as the base for negotiable certificates of deposit (NCDs).
The cash crunch in China began in late June and lasted through early July when the central bank refrained from injecting adequate cash to meet market demand. Rates remained elevated through mid-July as banks scrambled for funds. (Reporting by Pete Sweeney; Editing by Jacqueline Wong)
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