China Pumps USD25bn in Funds to Banks While Keeping Key Rate on Hold

  • China injected the least amount of medium-term cash into the banking system since November, a sign that policymakers are watching the effects of past easing steps as the nation’s economic recovery appears to be on track.
  • The People’s Bank of China offered CNY170bn (USD25bn) of funds to banks through the medium-term lending facility. That resulted in a CNY20bn net injection in Apr 23, the smallest since Nov 22.
  • It also left the interest rate unchanged at 2.75%, the eighth month for it to stand pat.
  • The smaller liquidity provision indicates the PBOC is evaluating the impact of its March easing, when it had both cut a banking reserve ratio and provided more cash to support growth.
  • Data in Mar 23 indicated that an economic recovery is taking off, with credit expansion surging and exports beating estimates.

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