The People's Bank of China will work with banking, insurance and securities regulators to draft specific rules
By Gabriel Wildau in Shanghai
China's central bank injected a record Rmb570bn ($84bn) into the country's banking system via open market operations on Wednesday, the latest effort to boost liquidity and promote increased lending to a slowing economy.
Credit and money-supply data released late on Tuesday showed that lending through both bank and non-bank channels remained sluggish in December, despite a series of easing measures in recent months, including a cut to banks' required reserve ratio (RRR) in early January.
That move will eventually inject a net Rmb800bn into the banking system. The People's Bank of China injected Rmb350bn via seven-day reverse bond repurchase agreements on Wednesday and an additional Rmb220bn via 28-day reverse repos, the PBoC said in an online statement.
The Rmb570bn injection was the largest ever using reverse repos. Analysts say that unlike the RRR cut — which is permanent unless the PBoC reverses it — the injection of temporary liquidity on Wednesday is primarily an effort to ensure that banks have enough cash to weather the upcoming Chinese New Year holiday in early February. Liquidity demand is elevated during this period as households exchange cash gifts and companies pay bonuses and make tax payments.
“Currently [the economy] is still in a peak period for tax payments, and the overall volume of banking system liquidity has declined rather quickly,” the PBoC said in an explanation of Wednesday's injection.
https://www.ft.com/content/7136dfa8-1944-11e9-9e64-d150b3105d21
No comments:
Post a Comment