Any staffers at People’s Bank of China headquarters planning a vacation in the last two months of 2023 are almost surely hitting the “cancellation” button.
No major monetary authority is likely to be busier than Beijing’s between now and January 1 than the one Pan Gongsheng leads as governor. In the last 24 hours alone, the PBOC made headlines by, first, signaling a fresh liquidity surge to halt a jump in money market rates and then doing the opposite by draining about US$15 billion from money markets.
It dramatizes the ways in which the PBOC is caught between Federal Reserve rate hikes in Washington, Bank of Japan dovishness in Tokyo and credit market volatility everywhere else.
Add in China’s economic downshift, capital fleeing Shanghai and Shenzhen stocks, and enduring investor concerns about regulatory uncertainty in Beijing and it’s easy to see why holiday plans are likely being canceled at PBOC central.