World Economy

China Central Bank to Inject $32b Into Banks

China Central Bank to Inject $32b Into BanksChina Central Bank to Inject $32b Into Banks

China’s central bank (PBOC) is said to plan the injection of about 200 billion yuan ($32.7 billion) into some national and regional lenders as Premier Li Keqiang steps up stimulus to support economic growth, Businessweek reported.

The People’s Bank of China is providing funds to joint-stock banks to help them prepare for year-end liquidity needs, said a government official familiar with the matter, who asked not to be identified because an official announcement hasn’t been made. Joint stock banks are mid-size national banks with mixed ownership.

The injection comes after the central bank provided 500 billion yuan of liquidity to China’s five biggest banks last month, a government official familiar with the matter said at the time. Premier Li has refrained from using broad-based stimulus and expressed a preference for reform to boost an economy weighed by a property slump.

“The economy is decelerating, and I believe it is high time to do more easing to stop the downward trend,” Shen Jian-guang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd. said.

The central bank has informed 20 banks, mainly joint-stock lenders including China Guangfa Bank Co. and Industrial Bank Co. to submit applications for funds in the form of three-month loans from the central bank.

Central bank Governor Zhou Xiaochuan said earlier this month that the PBOC will stick to prudent monetary policy to ensure reasonable growth in money and credit. China’s employment is better than expected and inflation will probably “stay mild,” he said.

Subdued inflation figures released last week give the bank more room to further ease monetary policy. The PBOC cut the interest rate it pays lenders for 14-day repurchase agreements for the second time in a month.