Via MNI:

  • People’s Bank of China (PBOC) has cut the rate on the repurchase agreements that it transacts directly with the market for the second time in less than a month (14-day repos to 3.4% from 3.5%)
  • PBOC last cut the rate on September 17, from 3.7%
  • Part of the the government making good on its pledge to lower financing costs
  • “A source close to the PBOC said the decision to lower the rate isn’t considered part of Beijing’s ongoing “targeted easing” measures but is designed to ease the financing burden faced by smaller companies in China’s financial system”
  • “We’re just guiding interest rates lower in order to reduce financing costs for small and medium-sized enterprises. The 14-day repo rate is short-term and its scale is small,” the MNI source said
  • Said the PBOC is likely to continue lowering the rate to support smaller firms