People’s Bank of China Drains Funds to Curb Lending Surge


On February 18th, 2014, People’s Bank of China drained CNY 48 billion (USD 7.9 billion) from money markets to absorb liquidity, as bank lending jumped more than expected in January.

In January, bank loans exceeded market expectations. Loans by Chinese banks rose to CNY 1.3 trillion (USD 216 billion), up by CNY 246.9 billion from a year ago, reaching the highest value in four years. 

On February 17th, the benchmark rate for short-term loans among banks, the seven-day repurchase rate, stayed below 4.0 percent, higher than 2.75 percent in June, when the central bank last used repos to curb liquidity, but apparently at a very low level.

On February 18th, the People’s Bank of China conducted for the first time in eight months, a CNY 48 billion (USD 7.9 billion) of 14-day repurchase contracts at 3.8 percent. On June 6th, 2013, the central bank sold CNY 10 billion of 28-day repos.


People’s Bank of China Drains Funds to Curb Lending Surge


Joana Taborda | joana.taborda@tradingeconomics.com
2/18/2014 12:35:45 PM