Newsmaker: Zhou Xiaochuan, governor of the People's Bank of China

Zhou Xiaochuan, governor of the People's Bank of China (PBOC), attends a news conference in Beijing, China, on Thursday, March 12, 2015. China's central bank is pushing ahead with plans to liberalize interest rates even as the economy slows, a reform that would effectively end a dual-track rate system that has seen savers subsidize decades of investment-fueled growth. Photographer: Tomohiro Ohsumi/Bloomberg

Independent.ie Newsdesk

There's a Catch-22 confronting Zhou Xiaochuan. To defend the yuan from rapid depreciation, China's central bank chief is having to intervene to buy yuan and sell dollars, drying up liquidity in the banking system.

That's a brake on growth that leads to more downside pressure on the currency, increasing the need to intervene in the foreign-exchange market, draining liquidity anew. And on it goes.