PBOC Details of Targeted Tools for Injections in March

PBOC Details of Targeted Tools for Injections in March

The People’s Bank of China on Friday released details of its targeted monetary tools used to provide liquidity to the financial system in March.

It loaned CNY134.5 billion via Pledged Supplementary Lending to three policy banks compared with CNY35.6 billion in February. The outstanding amount rose to CNY1.39 trillion at the end of March from CNY1.26 trillion at the end of February, it said.

It provided CNY16.67 billion via the Standing Lending Facility to banks in March with maturities of overnight and seven days and an outstanding balance of CNY16.6 billion at the end of March, the PBOC said. In February it loaned banks CNY3.402 billion via the facility.

The PBOC didn’t inject liquidity to banks via the Medium Term Lending Facility in March. In February it loaned banks CNY163 billion via this facility. Outstanding money issued via the Medium Term Lending Facility remained unchanged at CNY1.3313 trillion at the end of March.

All of the above tools have been introduced in the past two years to provide liquidity to different banks and guide money-market interest rates.

The PBOC typically injects liquidity to banks in the month ahead of the Chinese New Year holiday and withdraws it after the holiday.

The PBOC cut banks’ deposit-reserve ratios by 50 basis points at the beginning of March – releasing about CNY600 billion into the banking system.

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