China Has Quietly Hiked Borrowing Costs With PBOC Operations
- PBOC ‘essentially’ boosted rates quarter point: JZ Securities
- Move is latest sign of selective tightening to temper leverage
China Tightens Monetary Conditions
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Without a policy announcement, China’s central bank has effectively tightened monetary conditions in recent weeks, an analysis of its transactions shows.
The People’s Bank of China has cut back on seven-day open-market operations and is instead injecting more funds through 14-day and 28-day contracts. That’s had the effect of raising short-term borrowing costs and pressing up bond yields. It’s another sign of selective tightening by the PBOC that’s reinforced the views of many economists that China has turned the corner away from monetary stimulus.