The People's Bank of China took a cautious stance before the Fed

Before the Fed's interest rate decision, the People's Bank of China took a cautious step in the medium-term policy rate to avoid further widening of the policy divergence.

The bank, which has been taking easing steps to support the economy for a while, kept the medium-term policy interest rate at 2.85 percent. The expectation of economists participating in the Bloomberg survey was to keep this interest rate constant.

In the statement made by the People's Bank of China, it was promised to increase measures to support the economy, which was damaged by the Kovid-19 shocks.

In the statement, it was stated that within the framework of medium-term loans, 200 billion yuan was given to some financial institutions with a 1-year maturity at an interest rate of 2.85 percent, and it was emphasized that this cash would keep the liquidity of the banking system at a reasonable level.

Recently, in monetary policy, China has been different from the world's leading central banks, especially the Fed, due to the negative impact of epidemic measures on economic activity.

While other central banks decided to tighten to combat inflation, monetary policy in China was showing a framework that encouraged the economy.