PBoC tames cash injections
(16 July 2015 – China) The People’s Bank of China (PBoC) lowered the amount of cash it added to the financial system on 14 July, signalling that short-term lending rates are near the central bank’s target range.
The PBoC conducted 20 billion yuan (A$4.3 billion) of seven-day reverse-repurchase agreements on 14 July, less than the 50 billion yuan that matured.
The seven-day repo rate, a gauge of cash availability in the banking system, opened at 2.50 percent for a sixth straight day.
Benchmark interest rates were cut and the reserve-requirement ratios for selected banks lowered around the last week of June to boost liquidity amid a stock market rout that led to trading suspensions for about half of the listed companies.
The M2 measure of money supply rose 11.8 percent in June from a year earlier, while aggregate financing was 1.86 trillion yuan, both exceeding forecasts, data from the central bank showed on 14 July.
Foreign-exchange reserves dropped to US$3.69 trillion (A$4.96 trillion), the lowest since September 2013.
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