(MENAFN- ProactiveInvestors - Australia) China shares pared hefty losses after earlier testing 4-1/2-year lows on Tuesday after the central bank said it will use tools to safeguard stability in money markets and tight liquidity is set to ease.
This would provide relief for a cash squeeze in the world's second-largest economy.
The People's Bank of China has provided liquidity to some financial institutions to stabilize money-market rates and will use short-term liquidity operations and standing lending-facility tools to ensure steady markets,
The benchmark Shanghai Composite Index lost 0.19 percent, or 3.73 points on Tuesday, to end at 1,959.51, the lowest point in nearly seven months.
The Shenzhen Component Index shrank 1.23 percent, or 93.43 points, to 7,495.10.
The central bank said "With the elimination of seasonal and emotional factors, interest-rate fluctuations and the tight liquidity situation will gradually ease."
Analysts believe that while officials are unlikely to cut benchmark interest rates or banks' reserve requirements, the credit squeeze will need to end if economic growth is not to fall further.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.