PBOC moves manage to tame high financing costs

Shanghai

CHINA'S central bank brought out an array of tools to target high financing costs this week, reducing interest rates, offering cheap loans and adding cash to the financial system through open-market operations.

Money market rates are finally buckling under the pressure, with the overnight rate breaking a record 39-day run of increases and interest rate swaps slipping to the lowest since July. Supply of cash has lagged demand especially since the Aug 11 devaluation that saw the People's Bank of China buying yuan on subsequent days to lend it stability.