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Naghmeh🎩
@naghmehm66
The cost of borrowing through seven-day interbank committed repurchase agreements, a key short-term financing tool, rose to its highest level since October 2023. The spread between this rate and the PBOC's reverse repo reference rate is now at its widest since early 2021. Last September, it injected monetary stimulus into the economy to spark growth. Now it is doing the opposite, reducing liquidity to prevent the yuan from falling further. This week, Beijing stepped up its support with tighter capital controls, vowing to prevent market disruptions. Last week it even suspended government bond purchases to prevent a debt-buying frenzy. But these decisions dry up cash in the system.
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Hadi🎭🎩
@hadi1990
Yes, this clearly shows that banks and financial authorities attach great importance to changes in monetary policy. Raising or lowering borrowing rates can have major effects on the economy, including affecting economic growth, inflation, and liquidity. Here are some important points to avoid: 1. **Borrowing Costs**: Rising rates can have negative effects on lenders and consumers, as the cost of borrowing increases. 2. **Monetary Policies**: Banks can raise borrowing rates to control inflation, or lower them to stimulate economic growth. 3. **Impact on Capital Markets**: Changes in rates can also affect capital markets, as investors may seek higher yields.5 $DEGEN
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