China's central bank denies problems, says that market fluctuations are temporary

An official of the Chinese central bank, the People's Bank of China (PBOC), has said that financial markets are stable this year, and that fluctuations are temporary in nature. They said that seasonal factors will gradually disappear, but that the bank is monitoring liquidity conditions closely.

Last week China’s interbank lending rate – known as Shibor – spiked dramatically. The rise in Shibor indicates banks are only willing to lend to each other at unusually high rates, and is read by many as a sign of a looming crisis.