CRI听力: China's Banks Pay Record Deposit Rate for Government Cash

Chinese commercial banks are now offering record-high deposit rates to secure government money at auction, now that they are facing a cash shortage before the Chinese New Year holiday.

The finance ministry has obtained a six-month deposit rate of 5.9 percent, up from 5.4 percent at a similar-sized auction last month.
 
That's the highest rate paid in more than four years.

The cash shortage is a result of a combination of factors, including month-end accounting requirements and the New Year holiday.

The central bank says it is suspending sales of bills in open-market operations for a second week, to help alleviate a cash shortage.

The People's Bank of China has ordered lenders to set aside more as reserves four times in the past three months. It has also boosted its benchmark one-year lending and deposit rates twice in the fourth quarter last year.

For more on the liquidity issues in China's banks, we spoke earlier to Chang Jian, China Economist of Hong Kong based Barclays Capital.