Coronavirus: China injects US$7.9 billion into banking system in latest bid to shore up liquidity
- The People’s Bank of China cut its targeted medium-term lending facility by 20 basis points on Friday to 2.95 per cent
- The rate cut was the latest in a flurry of measures in recent months aimed at keeping liquidity ample to support China’s weakened economy
The People’s Bank of China (PBOC) injected 56.1 billion yuan (US$7.9 billion) into the banking system via the targeted medium-term lending facility (TMLF), just as 267.4 billion yuan of the debt comes due.
The one-year funding was offered at an interest rate of 2.95 per cent, lowered from the 3.15 per cent of the last operation in January. Analysts had expected a cut after the central bank lowered rates on some of its other policy tools to all-time lows.
It skipped offering short-term funding via open market operations for a 17th consecutive day, according to a statement. The yield on 10-year government bonds extended declines to 2.46 per cent after the announcement, the lowest level since 2002. Futures of the same tenor gained 0.32 per cent by mid morning in Shanghai.
