China's Premier Li Keqiang pledges "appropriate liquidity" in 2014
SHANGHA (REUTERS) - Chinese Premier Li Keqiang has said that the government will keep liquidity at an appropriate level in 2014 to maintain the stability of financial markets and the broader economy.
He made the remarks during a recent inspection tour to the northern Chinese city of Tianjin, according to an account published on the website of the State Council, China's cabinet, late on Sunday.
The comments came after cash crunches in China's money markets in June and December, which many market observers believe were engineered by the central bank, which refused to aid the market with large cash injections to help banks cope with elevated cash demand at the end of each quarter.
Market watchers interpreted the People's Bank of China's (PBOC) passive approach as short-term interest rates spiked as an effort to help curb non-stop growth in housing prices and a message to banks to de-leverage their balance sheets. Some have perceived an unofficial shift to tighter monetary policy.