Worries over China’s banking system contributed to a 2% drop in Shanghai shares on Friday, Reuters reported. In Asia, all eyes were on China after the country’s central bank sought to allay fears of a cash crunch late last week, saying it has added US$50 billion in three days to the interbank market. Rapid credit growth in the world’s second-biggest economy has worried China’s authorities, who fear rising debt levels are fueling asset bubbles. The combination of Fed tapering and tighter China interest rates could weigh on emerging market currencies and assets, as it did back in June.
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