China Cen­tral Bank Opens Liq­uid­ity Tap in Bailout

The Economic Times - - Money & Banking -

China’s bench­mark money-mar­ket rate fell the most in three weeks af­ter Pre­mier Li Ke­qiang sig­naled more pol­icy eas­ing to counter an eco­nomic slow­down and the cen­tral bank stepped up fund in­jec­tions. Pre­mier Li said the down­turn pres­sure in China’s econ­omy is “rel­a­tively large” and the na­tion will fine-tune poli­cies when needed to solve prob­lems such as fi­nanc­ing dif­fi­cul­ties for small com­pa­nies. The People’s Bank of China added a net 120 bil­lion yuan ($19.2 bil­lion) to the fi­nan­cial sys­tem last week, the most in four months, to boost cash sup­plies as lenders park cor­po­rate tax col­lec­tions at the cen­tral bank. The seven-day re­pur­chase rate, a gauge of in­ter­bank fund­ing avail­abil­ity, slid 18 ba­sis points, or 0.18 per­cent­age point, to 3.20% as of 4:11 p.m. in Shang­hai, a weighted aver­age com­piled by the Na­tional In­ter­bank Fund­ing Cen­ter shows. That was the big­gest drop since May 5. The rate touched 3.11% ear­lier, the low­est level since May 19.—Agencies

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