SHANGHAI: China's central bank injected cash into the banking system on Monday, as it formally shifted its main policy rate to an overnight lending rate, a move analysts said would ease funding costs and support the economy.
The People's Bank of China (PBOC) injected 541 billion yuan (US$81.3 billion) through overnight reverse repurchase agreements at 1.25 per cent, according to a statement.
The central bank said last Friday that it would start to conduct overnight reverse repos every day and switch the seven-day operations to multiple rates from a single fixed one.
"The policy rate has officially shifted its anchor to the overnight rate, with the 1.25 per cent pricing confirming the existing benchmark for funding costs," said Ming Ming, chief economist at CITIC Securities.
%2Ffile%2Fpublisher-c1a3f893382d2b2f8a9aa22a654d9c97%2F2021%2F01%2F8ad6f03a006b1788cf136b7e572d2201.jpg&w=480&output=webp&q=85&we)
