PBoC cuts the one-year relending facility rate to 1.25% (prev. 1.50%), to increase tech innovation quotas by CNY 400bln to CNY 1.2tln

• Central Bank to boost relending quotas to power tech innovation.
• Pledges continued liquidity support via open market tools.
• Overnight rates will be guided to hover near policy rates.
• Will maintain ample liquidity to support bond issuance.
• Will flexibly conduct government bond operation going forward.
• Lowers minimum down payment for commercial property loans to 30% to boost market inventory clearance.
• No intention to use currency depreciation for trade advantage.
• Will guide expectation and prevent overshooting in CNY risk.

The PBoC's decision to cut the one-year relending facility rate to 1.25% reflects a shift towards more accommodative monetary policy aimed at boosting tech innovation through increased quotas. This move signals a commitment to ensure ample liquidity in the financial system, indicating potential support for risk assets and influencing expectations around the CNY's stability amid trade dynamics.