The People’s Bank of China yesterday rolled over a portion of a three-month lending facility from September that was due to expire, Bloomberg reported, citing an unnamed government official familiar with the matter. The facility was for RMB500 billion (US$81 billion) over three months with an interest rate of 3.5%. The PBOC used this liquidity injection to the nation’s largest lenders as part of a broad stimulus effort that also included the first cut to benchmark lending and deposit rates in two years on November 21. Recent indicators showing a continued downturn in manufacturing and investment have led economists to forecast upcoming cuts to banks’ reserve ratio requirements.
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