China yesterday denied rumors that the country’s central bank governor Zhou Xiaochuan (周小川) had fled after the bank posted huge bond losses, a report said.
Several Chinese Web sites reported on Monday that the People’s Bank of China (PBOC) had incurred a US$430 billion loss on bonds from US mortgage giants Fannie Mae and Freddie Mac and that Beijing might punish some people, including Zhou.
RUMORS SWIRL
The Web sites cited the Ming Pao Daily as their source, but the Hong Kong newspaper denied publishing any such articles, Dow Jones Newswires reported. The reports fueled rumors among Chinese Internet users that Zhou had left the country.
“They say that Governor Zhou has fled …” central bank deputy governor Hu Xiaolian (胡曉煉) said. “But in actual fact Zhou was chairing a PBOC meeting.”
SHARES DOWN
Chinese shares were down 0.44 percent in afternoon trade.
“Usually market volatility is in response to economic news, data or analysis. People will speculate on such factors. But to speculate on this sort of thing is extremely abnormal,” Hu said.
AT WORK
The central bank was at pains to prove that Zhou was at work, issuing two statements on Monday with photos of the PBOC governor meeting with a Japanese official and a former Italian official.
The Ming Pao Daily said its “editorial department clarifies that it hasn’t made any such report, and it strongly condemns the act of using Ming Pao’s name to spread false information.”
The newspaper said it had reported the incident to the Hong Kong police and mainland authorities.
The central bank declined to comment on the report when contacted by journalists.
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