China money market stress a non-story
There was no real stress amid heavy borrowing to get over the quarter deadline
Business reporters with too little to do make up stories about stress in China’s money market. Chinese financial institutions typically borrow heavily for quarter-end window dressing. The modest rise in 7-day repo rates during the past few days is smaller than other quarter ends, notably Q2 2015. Note that 7-day repo (to get over the quarter deadline) has risen more than 1-day repo. When there was real stress, for example in January 2015, both 1-day and 7-day repo rise sharply. Nothing to see here, folks.