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1 Nov 2013
Flash: Concerns about borrowing squeeze in China largely overblown - BBH
FXstreet.com (Barcelona) - While the PBOC has been back conducting reverse repo operations recently, Marc Chandler, Global Head of Currency Strategy, notes that concerns about another borrowing squeeze in China have been largely overblown.
Key Quotes
"There has also been a lot of focus on the financial sector, with rumors that the forthcoming report on local government financing vehicles will come in at the lower end of estimates (RMB14 trln, compared with some estimates of as high as RMB20 trln)."
"In addition, NPLs at ICBC, CCB, Agricultural Bank, and Bank of China rose 3.5% in the last three months of data. According to Bloomberg, the combined NPLs in Q3 came to RMB330 bln ($54 bln), leading to an average bad-loan ratio of 1.02%."
Key Quotes
"There has also been a lot of focus on the financial sector, with rumors that the forthcoming report on local government financing vehicles will come in at the lower end of estimates (RMB14 trln, compared with some estimates of as high as RMB20 trln)."
"In addition, NPLs at ICBC, CCB, Agricultural Bank, and Bank of China rose 3.5% in the last three months of data. According to Bloomberg, the combined NPLs in Q3 came to RMB330 bln ($54 bln), leading to an average bad-loan ratio of 1.02%."