PBOC Sees Liquidity as Ample in Sign a Rate Cut Is Unlikely

The PBOC has taken a cautious easing path this year, refraining from cutting policy rates since January.

(Bloomberg) — Liquidity in China’s interbank market is more than “reasonably ample,” a senior central bank official said, an indication that further interest rate cuts are unlikely.

The 7-day reverse repurchase rate is around 1.6%, lower than the cost of short-term policy loans the People’s Bank of China (PBOC) provides via its daily open market operations, Zou Lan, the head of the monetary policy department, told reporters Wednesday in Beijing. The rate on the PBOC’s 7-day loans for lenders is currently at 2.1%.