China’s central bank injected liquidity into the financial system via open-market operations for the first time since Feb. 17, ending the longest hiatus since December 2018. It also cut interest rates on the loans.
The People’s Bank of China will inject 50 billion yuan ($7.1 billion) into the banking system using 7-day reverse repurchase agreements, according to a statement Monday. It cut the interest rate to 2.2% from 2.4%.
The move comes after China’s top leaders signaled Beijing is preparing larger-scale stimulus to counter the economic fallout from the coronavirus. The PBOC re-emphasized it will keep liquidity sufficient to help the real economy while watching out for inflation risks.