China’s central bank has published details on its latest tool to provide liquidity as it refrains from across-the-board cuts to benchmark interest rates.
The People’s Bank of China confirmed it pumped 769.5 billion yuan (US$126 billion) into the nation’s lenders in the past two months through a newly created medium-term lending facility (MLF).
The central bank injected 500 billion yuan in September and 269.5 billion yuan last month via the facility — all termed at three months with an interest rate of 3.5 percent.
The announcement, included in the bank’s quarterly monetary policy statement, is the first official confirmation of earlier reports of the injections.
Goldman Sachs Group Inc said every 500 billion yuan in funds from the central bank is approximately equal to a 50 basis point cut in the required reserve ratio.
The move “affected mid-term interest rates, while providing liquidity to guide commercial banks to lower their lending rates and overall social-financing costs,” the central bank said in the report published yesterday.
“As liquidity generated from capital inflows eases, MLF has played a role of covering the liquidity gap, and maintaining a neutral and appropriate liquidity situation,” the central bank added.
The facility is the latest unconventional liquidity tool as the Chinese central bank joins the European Central Bank on a path of easing, even as the US begins the shift to a more normal monetary policy.
The expansion builds on targeted steps to support growth in Asia’s largest economy, while stopping short of broad-based monetary loosening and fiscal stimulus, that could raise debt risks and the risk of bad loans.
Last year, the central bank introduced the standing lending facility (SLF), a tool similar to the discount window at the US Federal Reserve and the marginal lending facility at the European Central Bank, to provide short-term liquidity to banks.
The Chinese central bank did not use the SLF in the third quarter, with the outstanding value at zero as at the end of September, it said.
China will continue to implement a “prudent” monetary policy and use various tools to manage liquidity, the PBOC said. The central bank has left reserve requirements for the largest banks and benchmark interest rates unchanged for more than two years.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS