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PBOC Seen Winding Down Cash Injections as Money Rates Decline

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The People’s Bank of China is forecast to keep scaling back cash injections via open-market operations next week as a flush banking system causes money rates to slide.

The central bank conducted 40 billion yuan ($6.4 billion) of reverse-repurchase contracts that add funds this week, compared with 85 billion yuan in the previous period, leading to the first weekly net withdrawal since April. The monetary authority will probably continue to pare injections or halt them altogether, according to Minsheng Securities Co. and Fortune Securities Co.