PBOC Actions Designed to Direct Cash Where its Needed

China’s piecemeal approach to loosening monetary policy this year may be discreet, but the cumulative effect is proving just as powerful as an outright cut in bank reserves.

Wary of being criticized for not doing enough to wean the world’s second-largest economy off its reliance on easy credit and heavy investment, authorities have ruled out major stimulus even as growth slowed to an 18-month low in the first quarter.

Instead, the People’s Bank of China (PBOC) has relied on four low-key adjustments that have added a total of 550 billion yuan ($88 billion) into the banking system, a calculation based on a Reuters poll and information from sources shows.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.