Economics
PBOC Trims Liquidity Supply in Sign It's Dialing Back Stimulus
- Overnight repo rate at four-year high as cash supply tightens
- Central bank is trying to cool down credit market: Citic
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China’s central bank cut some of the long-term funding it supplies banks in a sign it may be dialing back its monetary stimulus as the economy strengthens.
The People’s Bank of China rolled over about half of the funds coming due via 1-year medium-term lending, and also offered to lend 160 billion yuan ($24 billion) for 7 days via reverse repurchase agreements. Combining the two offerings on Wednesday mean there was a net withdrawal of 6.5 billion yuan from money markets after 366.5 billion yuan of MLF loans matured.