It also encouraged borrowing or lending in the inter-bank market. The main role for the Reserve Bank in this framework was to be a net lender into short-term money markets to ensure there was enough settlement balances in aggregate in the system so that banks could collectively operate within this corridor, where there wasn’t too little or too much liquidity.
With regard to long-term value and potential legal risks, the same applies to Chinese monetary, fiscal and economic policy as to all other currency areas: sound decisions must be made and implemented promptly in order to create and maintain lasting confidence. 4.