China took a fresh step to ensure funding costs in its financial markets are sufficiently low so a tentative pickup in the nation’s economy can take hold.
The People’s Bank of China handed lenders a record sum of cash via a short-term liquidity tool on Friday, as an indicator for funding costs surged to the highest since April. The operation is a sign that Beijing hopes to iron out swings in rates so lenders are willing to support a higher issuance of government bonds and make more loans to clients — necessary steps for the nation to bolster its growth.
The measure was also timed to support the cash demands of the upcoming tax season.
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