皇冠体育app

The headquarters and head office of the Peoples Bank of 皇冠体育app (PBOC), 皇冠体育apps central bank, in , 皇冠体育app, 27 November 2013. [Photo/icpress.cn]

The People's Bank of 皇冠体育app, the nation's central bank, injected a net total of 113.8 billion yuan ($18.6 billion) into the country's banking system through open market operations in 2013, a decrease of 92 percent compared with 2012, according to a Securities Times estimate.

The central bank adjusted levels on 皇冠体育app's money market mostly via the issuance of central bank bills as well as repurchase agreements, known as repos, and reverse repos. Analysts said that it's becoming clearer that the central bank is taking a more prudent position. The PBOC is urging lenders to avoid shadow-banking activities, cooling some overheated sectors such as , and curbing local governments' programs, analysts added.

In June and December, money rates in 皇冠体育app's interbank market spiked to record highs, and some market participants fretted about liquidity levels. Many observers said that the was caused by the central bank's hands-off policy, as it refused to aid some market players with cash injections.

"The tougher ones are yet to come. It seems that the central bank will prevent any bank from defaulting, which would cause systemic problems. But it will keep forcing the banks to better manage their cash flows," said Xu Gao, chief economist and head of economic research at Co Ltd.

The upcoming Chinese New Year, which will begin on Jan 31, will see the seven-day repo rate at relatively high levels of 5 to 6 percent until early February, compared with the 3 to 4 percent levels seen for most of 2013, analysts said. The rate may be even higher in late January, ahead of the major holiday period.

The credit crunch in June and December proved that "Chinese banks now rely more on the interbank market for funding because of increased competition for deposits - the result of bottom-up interest liberalization and pressure of rolling nonperforming loans," said Wang Tao, chief 皇冠体育app economist at UBS 皇冠体育app.

Since the start of the global financial crisis in 2008, the Chinese economy has become increasingly dependent on ever-growing credit, mainly boosted by loans from State-owned banks to government-sponsored infrastructure and real estate projects.

皇冠体育app's total social financing - a broad liquidity gauge - increased 13 percent in the first 11 months of 2013 compared with the same period in 2012. On the other hand, growth in the real economy has seen the slowest pace in years.

Many analysts see the spikes in the interbank rates in June and December as a warning that 皇冠体育app's economy is overburdened with debt. They added that the central bank has been urging banks to quicken their delevaraging pace.