The tight money supply in recent........>

CHINA PRESS: The tight money supply in recent weeks is not necessarily a bad

thing, the China Securities Journal argued in a commentary Wednesday. Especially

in the past two weeks, liquidity has been unexpectedly tight, partly because of

banks' low excess reserve ratios. The People's Bank of China's restraining from

injecting much liquidity into the market under such circumstance may have the

aim of avoiding a rebound in banks' leverage ratios or act as a warning about a

rebound in bank issuance of negotiable certificates of deposit that took place

in July, the newspaper said. Though liquidity is tight and the central bank is

acting tough, it will motivate financial institutions to better manage their

liquidity and control leverage, the newspaper argued. (China Securities Journal)