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China Faces Liquidity Squeeze Amid Efforts to Defend Yuan
China Faces Liquidity Squeeze Amid Efforts to Defend Yuan
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The People’s Bank of China (PBOC) has intensified its efforts to defend the yuan against the strengthening US dollar, leading to a significant liquidity squeeze. This has caused short-term funding rates to surge to their highest levels in the past twelve months. The situation is worsening as the government struggles to stabilize the yuan, impacting the financial markets and increasing borrowing costs.
