China’s central bank is injecting a combined 500 billion yuan ($81.35 billion) of liquidity into the country’s top banks in moves to support a slowing economy, the Wall Street Journal reported, sending benchmark money market rate sharply lower on Wednesday.
The Journal, citing an unnamed Chinese bank executive, said the People’s Bank of China (PBOC) is pumping in 100 billion yuan each into China’s top five banks via standard lending facility.
The benchmark seven-day bond repurchase agreement opened at 3.25 per cent compared with 3.62 per cent at the close on Tuesday and a weighted average rate of 3.32 per cent the previous day.
Officials at the PBOC could not be reached for comment.
The report comes after a series of soft data raised worries that the economy is struggling to rebound from a weak start to the year.
Data out at the start of the week showed China factory output grew at the weakest pace in nearly six years in August, raising fears that the economy may be at risk of a sharp slowdown unless Beijing implements fresh stimulus measures.
The PBOC had launched Standing Lending Facility in 2013 to supplement other monetary policy tools such as open market operations.
SLFs are mainly used to provide one- to three-month loans directly to commercial banks.