JAKARTA (TheInsiderStories) – People’s Bank of China (PBoC) injects the largest amount of money RMB560 billion (US$82.84 billion) through open market operations today (01/16)to stimulate the slowdown economy. Recently the country’ economy moved lackadaisically, impacted by its trade war with the United States.
In open market operations, PBoC injects the fresh funds through a seven-day reverse bond repurchase agreement RMB350 billion and RMB220 billion through a 28-day reverse repo. A repo of RMB10 billion will be matured today.
PBoC stated, that the injection of funds was done to maintain adequate bank liquidity and anticipating the high funding needs during the peak tax payment season. “Overall liquidity in the banking system has dropped dramatically,” said the central bank in a written statement.
On Tuesday, Chinese officials signaled they would launch more stimulus measures in the near future, after data on export-import performance showed an unexpected slowdown that sparked fears of a global economic slowdown.
Prime Minister Li Keqiang said, China must prepare for difficulties this year as the economy faces increasing pressure. The country aims to keep economic growth within a reasonable range in 2019, he added.
To that, Li revealed, the government will boost investment in public services and infrastructure and expand consumption. Furthermore, the National Development and Reform Commission (NDRC) said in a statement, China will strengthen monitoring of its economic situation and improve its economic policies.
The world’s second-biggest economy slowed in 2018 caused the trade war, painful long-term structural adjustments to transition, and exports unexpectedly fell the most in two years in December.
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