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

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.

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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

China's Ministry of Commerce announces plan to foster new drivers of foreign trade, providing targeted support to offer stability and improve business confidence and expectation

Chinese New Yuan Loans (Dec) 910B vs. Exp. 800B (Prev. 390B)

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  • 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.
Context

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.

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