China central banker tries to reassure markets

BEIJING (AP) — China's central bank governor has promised to ensure there is enough money in financial markets to maintain stability after a credit crunch sparked fears of a possible crisis.

Zhou Xiaochuan said Friday in a speech in Shanghai that financial markets have adequate liquidity for normal activity. He did not mention last week's credit crunch and abrupt spike in interest rates but promised to ensure adequate credit.

Interest rates paid by banks to borrow from other banks jumped last week from their normal level of 2-3 percent to a record 13.4 percent when demand for loans outstripped supply.

"We will use various tools and instruments, timely adjust market liquidity and maintain the overall stability of markets," Zhou said, according to a text on the central bank's website.

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