The People’s Bank of China injected nearly $50 billion worth of low-cost funds into policy-oriented banks last month, suggesting the central bank may be ramping up financing for housing and infrastructure projects to support the economy.
The outstanding amount of the PBOC’s Pledged Supplemental Lending programme to policy banks climbed to 3.25 trillion yuan ($456 billion) at the end of December from 2.9 trillion yuan in the previous month, the central bank said in a statement on Tuesday.The net injection of 350 billion yuan was the largest increase via the tool since November 2022.
The PSL programme is seen as an important tool in Beijing’s arsenal, which the government can use to shore up the property sector and stabilise growth this year. Markets have been expecting the central bank to use the money to drive construction of public housing in a bid to alleviate a multi-year property slump that’s hammered consumer confidence.
Bloomberg News reported in November that policymakers were planning to provide 1 trillion yuan in low-cost central bank funding in phases.