(Bloomberg) -- China’s central bank stepped up support for its slowing economy by pumping in cash via policy loans for a second straight month.
The People’s Bank of China injected a net 100 billion yuan ($15.7 billion) into the banking system with its medium-term lending facility. It left the MLF rate unchanged at 2.85%.
Chinese banks in January extended a record amount of loans after the PBOC lowered borrowing costs for the first time since 2020 last month. The latest move could further bolster the economy facing headwinds from repeated Covid outbreaks and a slowdown in the nation’s property sector, especially as manufacturing activity readings and holiday tourism data indicate weak domestic demand.
In January, the PBOC cut the rate on its one-year policy loans by 10 basis points to 2.85%, the first reduction since April 2020. It also net injected 200 billion yuan of MLF into the banking system.
Sixteen of the 27 economists polled by Bloomberg saw the central bank keeping the interest rate on its one-year policy loans unchanged. Six of them expected a 10-basis point cut and another five forecast a 5-point reduction.
©2022 Bloomberg L.P.
