China shifts policy rate to overnight lending rate
China central bank injected billions of yuan into the banking system while formally shifting its main policy rate to an overnight rate. The move aims to ease funding conditions and support the slowing economy amid market pressures.
Insights:
China injected 541 billion yuan ($81.3 billion) into the banking system on Monday morning, formally shifting its main policy rate to an overnight lending rate of 1.25%. The move effectively lowers the floor of the nation's interest-rate framework by 15 basis points. Policymakers deployed the liquidity injection to ease funding conditions and support economic growth amid rising credit concerns in the bond market.
