PBoC chides banks on cash tightening

China’s central bank on Monday broke its silence on the country’s recent cash crunch, blaming banks for not adapting to the credit environment, Financial Times reported. The statement from the People’s Bank of China, released Monday but dated June 17, said that banks must pay attention to liquidity in the market while also strengthening against potential tightening. Interbank lending rates soared last week as access to credit dried up. Banks waited for the PCoB to pump cash into the market but the central bank held out until Friday when it injected about US$8 billion. The delay showed the government’s willingness to tighten credit growth despite adverse effects on the economy.