Central Bank of China. Try to stop the collapse of its economy with a record injection of capital.
China’s central bank has been forced to make a capital injection as never before performed following the method used by the European Central Bank.
In view of the strong fall in a row and the values of the different Asian markets, the Central Bank of China has announced an injection of 130.000 billion yuan, equivalent to 20,000 million, to stem the decline of the national system unchecked financial.
It is the largest maneuver as to intervene to ensure liquidity and curbing potential problems that may occur based on this fact and be targeted by other economies that are below what is now considered the second largest economy.
A somewhat different method is used if it is asset purchase agreements with the status of being repurchased by the selling banks, the system called reverse repurchase agreement, or “repo” is subject to interest of 2.25 percent. It is a move that already took place last week with the same constraint as it relates to interest on that occasion were 10,000 million equivalent to US $ 1,500 million yuan.
And the negative spread in different Asian markets seems endless. The main Shanghai index, I collapsed on Monday 6.85 percent causing a bearish environment that was spreading all world markets. And the entry into force of a new law requiring the closing market quote if this suffer a sharp decline, I avoid greater evils. So, it was 92 minutes before the official time the benchmark Shanghainese, was delisted on the screens.
A day later after several oscillations could enter positive on several occasions closing at 0.26 percent negative. A slight decrease when compared to what happened just a day earlier.
On the other hand, in Shenzhen, the other Japanese securities market, which also suffered from a big drop of 8.16 percent, leaving only 1.36 percent in the next session.
It is therefore the opening of the new measure of protection in case of a decrease of more than 7 percent of any quote this remains closed until the next day, has been tested on the day of its implementation with a result that seems bear fruit because of the negative inertia stops moving quote allowing time to analyze and implement some measure of braking to not follow the price falling uncontrollably.
Parallel to the Chinese situation, the Tokyo’s market was contaminated by Chinese descents and after enduring the day with highs and lows, giving the next day with significant declines.
The Nikkei lost 76.98 points while the Topix second indicator of strength in Japan fell 4.98 points.
Again the publication of negative indicators and the current situation in the Middle East, flooded the parquet uncertainty led investors to mass exit their positions more so generating some doubts about the second world economy.
The petroleum and automotive industries were affected by these publications and the conflict in the Middle East, as companies such as Sumitomo Chemical operates with the oil company Petro Rabigh in Saudi Arabia in cooperation with Saudi Aramco, was depreciated by 5.4 hundred.
In the same vein, and affected by the strengthening of the Yen against the US Dollar, Isuzu Motors lost 2.6 percent and Mazda Motor 2.3 percent.
But the most affected by the declines were the agricultural sectors with the fishing, as well as insurers and transport equipment sectors.
All this reflects a significant decline in trading volume that was about 0.059 trillion yen less than the previous day, some 464 million euros less.
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