China’s central bank injected money into the banking system for the second time in two weeks, sparking Shanghai stock-market rallies and signaling to investors the government’s determination to stimulate the economy, The Wall Street Journal reported. The People’s Bank of China used reverse repurchase agreements to inject US$42.14 billion into the market Tuesday, adding to the US$38.38 billion injected since late June. The Shanghai Composite Index rose 2% to 2115.23 making it Asia’s biggest gainer. Until now, authorities have avoided more powerful fiscal and monetary measures. The latest liquidity injection was the second biggest of its kind in China. Tamer measures in recent months have been attributed to uncertainty over the leadership handover, but with that date fast approaching more serious actions are expected.
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