MarketWatch reported, the People’s Bank of China pumped about 400 billion yuan (nearly $65 billion) into the banking system. This step is aimed at boosting Chinese banks' lending abilities to help spur the economy.
According to a person familiar with the matter, China’s central bank is making the injection via a major policy bank, China Development Bank, which lends the funds in the form of short-term loans to other banks on the interbank market. Importantly, the well-informed official asked not to be identified because the news is not public. Indeed, China’s central bank has not publicly disclosed the extra fund injection to avoid the wrong comments on its decision.
So, the board of the central bank fears that markets will treat the regulator’s decision as a too strong signal that it is broadly loosening its monetary policy. Therefore, China’s watchdog prefers to keep markets unaware of the ongoing stimulus program.
