China's central bank has made a move to encourage commercial banks to lend to large non-bank financial institutions, after many of them have suspended interbank operations in a tough situation with liquidity. This was announced by the Chinese financial magazine Caixin.

Caixin said that traders indicate worsening sentiment among banks about market conditions and growing caution with respect to inter-bank lending, especially after the US Federal Reserve provoked a sell-off in the bond market, futures signaled a greater number of rate hikes in 2017.

Liquidity has become a major factor in the market after the central bank increased the cost of open market operations last month.