China provided medium-term funds to lenders Thursday, giving banks some relief after the central bank’scash drainage last month triggered the country’s worst liquidity squeeze since 2015, reported Bloomberg.
The People’s Bank of China (PBOC) offered RMB 200 billion ($31 billion) of one-year liquidity with its medium-term lending facility, according to a statement. That helped offset loans maturing this month. It kept the interest rate on the funds unchanged at 2.95%.
While officials remain wary of excess liquidity, Thursday’s move adds to signs that the central bank is in no rush to wind down measures put in place to support the economy. The PBOC last week downplayed the significance of its recent cash withdrawals, saying in a quarterly report that authorities won’t make “sharp turns” in monetary policy, reported Bloomberg.