Even though China Evergrande has missed interest payments to its biggest bank creditors, banks seem to be waiting for official guidance from the government before making any moves to declare the property development company in default.
The banks–and investors and financial markets around the world–might get some of that guidance on Wednesday when the People’s Bank of China resumes daily open-market operations after a holiday break. At the least, the bank will tell all interested parties how much extra liquidity–if any–it’s providing to the financial system.
Evergrande’s big cash crunch has raised fears of cash shortfalls for other property companies–and some state-owned enterprises too–so a move to put more money into the financial system would be reassuring to markets.
