- Will increase refinancing quota to support small companies when necessary
- Average interest rate for corporate loans declined to below 5%, a record low
- PBOC will give full play to loan prime rate reform, relieve burden of Chinese firms
Actions speak louder than words and the liquidity boost today - the most in two months - does say something. For some context, the central bank injected roughly 200 billion yuan through reverse repos. It could be due to year-end demand, after one of the indicators of short-term borrowing costs surged to the most in a year yesterday.
If so, one can expect more to follow during the week and in the lead up to the Lunar New Year early next year.
But amid concerns about the growth outlook in the near-term i.e. omicron risks, we could see the PBOC retain or step up more support measures to keep the calm for now.
