The Money-Market Squeeze That Rocked Chinese Banks Last Month

The money-market squeeze that rocked Chinese banks last month may reduce credit growth this year by as much as US$122 billion, Bloomberg reported, citing a survey conducted by the news service. The figure represents the median estimate of 15 analysts who predicted reductions in credit growth as high as US$488 billion. Respondents also said they approve of the government's handling of the cash crunch, which reinforced their projection of a further loosening of controls on interest rates. June credit data due out this week is expected to further illustrate how the squeeze is affecting the economy as a whole.