China Maintained Its Liquidity Level in the Market
Burc Oran
October 15, 2021
Interest rates have not changed in China

China has maintained market liquidity at current levels as policymakers try to balance between supporting the economy and preventing asset bubbles.

The People’s Bank of China (PBOC) funded the market with 500 billion yuan ($77.6 billion) through its medium-term lending facility and met the 500 billion yuan due on Friday. The interest rate on medium-term lending facilities remained at the level of 2.95%.

Concerns over the possible spread of the China Evergrande Group crisis are intensifying, as the PBOC’s decision raises uncertainty over the need for further monetary easing from heightened price pressures. Financial regulators asked some major banks last month to speed up mortgage loan approvals in the last quarter of the year, according to sources familiar with the matter.

Crisis Concerns Deepen

PBOC Chairman Yi Gang said at the G-20 central bank governors meeting Wednesday that China’s prudent monetary policy would be “flexible, targeted, reasonable and appropriate” and that these pathways would support high-quality economic development, and that inflation in his country would generally be “moderate.”

The yield on China’s 10-year bonds rose nearly two basis points to 2.97%, while 10-year bond futures fell to their lowest level since the beginning of July.

China also provided liquidity to the market with a maturity of 10 billion yuan through seven-day reverse repo in open market operations.

Stay informed with market news by subscribing to our reading list.

This field is for validation purposes and should be left unchanged.

FTD Articles is a website prepared by FTD Limited's research team. FTD Limited is an online brokerage company offering products of Forex, Spot Metals and CFDs.
The ideas and the information shown here have no responsibility of any of the trading decisions made by the investors or the visitors of this site. Therefore, under no circumstances will FTD Limited nor FTD Articles be held responsible or liable in any way for any claims, damages, losses, costs or liabilities resulting or arising directly or indirectly from the use of website content. We recommend that you seek advice if you have not involved with trading before in order to prevent potential risks that may arise.

Pro Forex Analysis

Follow our Channels