People’s Bank of China injected US$12 billion into the country’s financial system Tuesday, a decrease from open-market operations in the past several weeks and a signal that generous past injections have improved liquidity, The Wall Street Journal reported. The central bank put US$26 billion into the market last week. The US$437.7 billion pumped into the market since June has been successful in lowering interbank interest rates, which will decrease financing costs for businesses. The central bank has held interest rates steady on the reverse-purchase agreements used to inject the cash, something traders said demonstrated a wariness of inflation, though inflation increased just 1.9% in September compared with a year earlier. The PBoC may end up draining money from the system for the week as a whole, traders said, as commercial lenders are set to return borrowed cash this week.
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