Panic stops: Bank of China seeks cure for markets

Moscow, February 3 – “News.Economy.” The people’s Bank of China decided to help the markets to get rid of panic and today will provide new amounts of liquidity, but this did little to reassure traders.

the Financial market of China today returned to work after a long vacation. All the negativity that has occurred in recent years on world markets, reflected in the quotes almost immediately.

the Shanghai Composite Index fell by 8%, the official rate of the yuan decreased by 1.15%.

today China Central Bank through REPO transactions will provide liquidity to banks in the amount of 1.2 trillion yuan.

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the regulator’s Representatives stated that they intend to provide markets absolute stability, this uses all the available Central Bank instruments, and will also maintain close contacts with key financial institutions.

However, as can be seen from the dynamics of the market, these incentives are not enough. Furthermore, trading in the Chinese stock market today was even stopped for a while.

the Fall in stock indices was the highest since 2015 and in a moment destroyed all growth in the last 12 months.

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curiously, the collapse does not stop even the ban on short selling.

On the risk aversion of bond yield China decline rapidly on ten-year securities now constitute 3% to at least 2016.

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the Collapse was not confined to the stock market. Contracts for iron ore fell 8% to an intraday limit set by the exchange, crude oil futures and palm oil and copper alsoe fell to the maximum allowable level.

according to Bloomberg, the regions that account for about 90% of the smelting of copper, 60% steel production, 65% of oil and 40% coal, ordered the companies to postpone the resumption of work at least until February 10.

it Seems that the taken measures China’s Central Bank is not enough to prevent collapse and the regulator will have to take additional measures, including rate cuts. Text: News.Economy