China bank funding rush shows caution over outflows

Shanghai

HOW serious is the risk of a sudden exit of funds from China's banking system? The nation's banks aren't waiting to find out.

Ninety-nine lenders announced plans for 5.8 trillion yuan (S$1.3 trillion) in certificate of deposit sales this year, data from the National Interbank Funding Center show, exceeding the full-year total of 5.4 trillion yuan in 2015. That echoes record issuance of CDs by Chinese banks offshore in December before a shortage of yuan caused overnight interbank interest rates to jump to 67 per cent in Hong Kong this week.