The People's Bank of China stepped up its efforts to accelerate the economic recovery, pouring more cash into the markets.
The People's Bank of China injected a net 191 billion yuan ($26.3 billion) of cash into the financial system, a day after it decided to cut banks' required reserves. It is estimated that this decision will have an impact of 500 billion yuan ($68.84 billion). With a move that can release as much as
The bank also injected 34 billion yuan ($4.7 billion) through a 14-day money market facility.
The Central Bank of China also kept its medium-term policy rate, the one-year lending rate, at 2.50%.
A series of cash injections by the PBOC demonstrated the authorities' intention to consolidate economic recovery momentum, as August data from industrial production to retail sales showed further signs of improvement.
Recent monetary easing and optimistic economic indicators have boosted risk appetite among investors, pushing the yuan and Chinese government bond yields higher.
Oversea-Chinese Banking Corp. "The more permanent liquidity released will provide strong support to the market. The fact that the medium-term policy rate remains unchanged indicates that the policy focus is shifting from the price of money to more direct support through fiscal spending and liquidity injection," strategist Frances Cheung said.