SHANGHAI (Reuters) – China is unlikely to see a repeat of the market turbulence similar to that of June 2013 as the risk of another liquidity crisis was currently low, the state-run Financial News newspaper said on Saturday.
The newspaper, which is affiliated with the People’s Bank of China (PBOC), said it was not unusual for some banks to hike their deposit rates to adjust the rate of return on some financial products.
“There’s nothing to fuss about,” said the newspaper, adding that the central bank had improved its risk control mechanisms and urged that market players should adopt a rational approach to mid-year liquidity conditions.
“There’s no need to exaggerate the liquidity risk, panic, feel helpless or create chaos,” it said.
June traditionally has tight liquidity. In late June of 2013, a cash crunch in China spooked global markets.
Traders said this week there were few signs of liquidity stress after central bank injections, though market expectations for tightening cash conditions towards the end of June have driven interest rates for longer-term loans higher.
(Reporting by Brenda Goh; Editing by Shri Navaratnam)