News Summary: China in credit crunch

News Summary: China sees credit squeeze as Beijing targets rising debt

Associated Press

SQUEEZE EASES: A squeeze on credit in China that is rattling world markets appeared to ease slightly as a key interbank interest rate edged lower, prompting speculation the country's central bank may have intervened to calm frayed nerves.

RATE DROP: The People's Bank of China generally does not comment on its market activities. The interbank lending rate fell to about 10.21 percent by midday Friday from 11.65 percent. The rate rose as high as over 13 percent Thursday,

DELIBERATE EFFORT: Analysts say the spike in the rates that banks charge each other for short-term borrowing is part of a deliberate, belated effort to trim off-balance-sheet lending that could threaten the financial stability of the world's second largest economy.

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