BEIJING: China’s central bank will get a chance on Thursday to send a signal to market watchers on its stance towards easing, when the equivalent of US$55 billion in loans mature.
While the People’s Bank of China (PBOC) typically rolls over the maturing medium-term loans, it could also use the opportunity to inject extra cash or lower the interest rate on the funds.
The economy is under pressure from the trade war, with China’s industrial output growth weakening to a 17-year low in July.
The PBOC has previously also offered targeted medium-term loans.
These funnel money to some lenders while avoiding broad easing.
To get cheaper financing, banks must pledge to lend more to small and private firms.
The central bank didn’t follow the Federal Reserve and reduce policy rates about two weeks ago.
Excessive easing could pressure its currency, which fell to a more-than decade low last week after the US planned new tariffs on Chinese goods.