Chinese central bank out with-their latest easing action
- Standard Lending Facility cut in 7 -day operations t0 3.25%
- action applies to some but not all financial institutions effective tomorrow (Friday)
- takes into account current liquidity conditions
- considers need for market-based interest rates, policy adjustment
- aims to build interest rate corridor to guide rates
That last comment is a repeat of a statement on which I posted here earlier this week adding that it would help develop a market-based " interest rate formation mechanism" by "facilitating the role of SLF interest rates in forming the ceiling of an interest rate corridor"
The PBOC declined to reveal the current rates from which these latest cuts will be made
Earlier this year the PBOC expanded one of its short-term financing channels nationwide to improve its supply of liquidity to the financial system.
The bank's Standing Lending Facility (SLF) has now become a nationwide programme after a pilot in ten regions covering small and medium-sized lenders.
At the time the PBOC said the decision will "improve channels for liquidity support for medium- and small- financial institutions and address seasonal volatility in liquidity before the Chinese New Year"
