Economics
PBOC’s Attempt to Exit Crisis Mode Faces a $500 Billion Test
- PBOC moving away from expansive monetary easing, cheaper money
- But banks will need help to buy government stimulus bonds
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China’s banks need about $500 billion in fresh liquidity this month to roll over existing debt and buy government bonds, complicating the People’s Bank of China’s efforts to exit crisis measures.
Monetary policy makers have been signaling for weeks that abundant funding made available to tide the world’s second-largest economy through the coronavirus slump will soon be reined in, mindful of rising debt risks.