PBOC to narrow rate corridor, no signs of healthier credit

The PBOC has announced plans to increase its control over overnight interest rates, marking another step in its efforts to adopt a more orthodox policy making approach. Still, the PBOC's multiple, competing objectives mean it won't resemble a conventional central bank any time soon. Meanwhile, the rise in China's credit to GDP ratio is not slowing, suggesting that the PBOC is failing in its goal of improving the quality of credit allocation across the economy.