China’s Borrowing Cost Slump Shows Limits of PBOC Policy Easing

(Bloomberg) — There is so much cash sloshing around China’s banking system and so little appetite for loans that a key rate has dropped to a level unseen since January 2021.

The cost to borrow in the overnight repo market fell below 1% on Wednesday, down 94 basis points this month, in another sign that much of the liquidity the People’s Bank of China is providing is sitting in banks.