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China Central Bank Says to Guide Interbank Market Rates

Nelson Ching | Bloomberg | Getty Images

China's central bank said on Tuesday that it would guide market rates to reasonable levels, and it expected seasonal factors that caused a recent spike in interbank market rates would gradually fade.

Appropriate liquidity management will help maintain reasonable growth in China's money and total social financing, and the People's Bank of China will manage liquidity in a flexible manner, Ling Tao, vice head of the central bank's Shanghai branch, told reporters in a news briefing for a financial forum in the city.

Short-term cash rates had soared last week after the People's Bank of China (PBOC) allowed funding to tighten in an apparent effort to curb credit channelled into China's vast "shadow banking" system.

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