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Market Chatter: China Central Bank Instructs State-Owned Lenders to Temper Interbank Lending

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The People's Bank of China told state-owned banking giants to slash their borrowings from the interbank market to prevent a plummet in interest rates to below the policy rate, Bloomberg reported Friday, citing people familiar with the matter.

China's central bank issued what is known as "window guidance" during times of volatility or when they want to manage the speed of credit extension, according to Bloomberg.

Beijing's instruction is seen to help banks to temper market expectations around access to liquidity, as well as manage the speed of credit extension amid global energy shocks, the report said.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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