‘PBOC has been quietly guiding interbank borrowing costs down’

‘PBOC has been quietly guiding interbank borrowing costs down’

While we await the bank’s reference rate for the onshore yuan (CNY) a snippet on the huge open market operation cash injections yesterday 

  • the biggest ever one-day injection of cash into the market
  • pumped in a net 560 billion yuan 

Says Bloomberg on the addition:

  • mostly aimed at addressing a funding shortage ahead of the Chinese New Year, it also speaks to a policy priority for the PBOC — providing cheaper funding to banks to allow them to lend to companies at lower rates.

And, other steps also:

  • Cut the amount of cash banks need to put aside as reserves
  • Expanded the eligibility of lenders for reserve ratios cuts
  • Lowered funding costs via a Targeted Medium-term Lending Facility
  • Halted funding provided via the pricier Medium-term Lending Facility

Stimulus will continue until morale improves!


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