Business reporters with too little to do make up stories about stress in China’s money market. Chinese financial institutions typically borrow heavily for quarter-end window dressing. The modest rise in 7-day repo rates during the past few days is smaller than other quarter ends, notably Q2 2015. Note that 7-day repo (to get over the quarter deadline) has risen more than 1-day repo. When there was real stress, for example in January 2015, both 1-day and 7-day repo rise sharply. Nothing to see here, folks.
China money market stress a non-story
There was no real stress amid heavy borrowing to get over the quarter deadline