Economics
China's Found a New Way to Pump Record Credit Without the Side Effects
- Policy makers continue turning away from older benchmark rates
- Mid-term funds inject liquidity for three months to one year
Why Money Keeps Flowing Out of China
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China is increasingly managing the flow of credit with more finely-tuned instruments than its old method of changing how much of their deposits lenders must keep locked away.
Banks’ required reserve requirements haven’t changed for almost a year. Instead, the central bank has used short-term lending channels to add almost six times as much funding than would have been added by lowering banks’ RRRs by half a percentage point.