China’s central bank PBoC announced on Sunday to lower the standing lending facility rate by -30bps. Overnight, seven-day and one-month borrowing costs were lowered to 3.05%, 3.20% and 3.55% respectively. The move was a catch up to similar reductions in other liquidity tools as part of the coronavirus relief measures.

PBoC also said in the quarterly monetary policy implementation report that “prudent monetary policy will be more flexible and appropriate”. It will maintain liquidity at a “reasonably ample level”. It will also continue to deepen the reform of the loan prime rate regime and improve monetary transmission mechanism.

However, the phrase of avoiding “excess liquidity flooding the economy” was omitted.

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