• PBOC makes a net cash injection of 199 billion yuan via MLF.
  • The central bank of China has recently ramped up medium-term liquidity injection.
  • The People’s Bank of China (PBOC) injected a net of 199 billion yuan.

China’s central bank has recently ramped up medium-term liquidity injections as it rolled over maturing policy loans on Wednesday, keeping the interest rate unchanged, matching market expectations.

According to a recent Twitter post by @tedtalksmacro, China’s central bank completed its single-largest liquidity injection on Friday, which will benefit the country’s economy and assist China in emerging from its current economic slump.

The People’s Bank of China (PBOC) injected a net 199 billion yuan ($29.15 billion) through its one-year medium-term lending facility (MLF) last month, which is in line with the median projection of 200 billion yuan among economists polled by Bloomberg.

With current affairs, China has the world’s second-largest economy, behind only the United States. Nonetheless, the Chinese economy has grown consistently in recent years, expanding at a rate of 2.2 percent higher than the U.S. economy. With $6 trillion in assets, the People’s Bank of China (PBoC) is the world’s third-largest central bank. Furthermore, the People’s Bank of China plays a vital role in global liquidity.

Most economists are focused on the impact of a Fed tightening on risky assets this cycle, but they are ignoring the scale of easing in the East. The fourth largest central bank in Japan and China are simply injecting liquidity into global markets, beating the Fed’s tightening policies.

In a subsequent thread of tweets, @tedtalksmacro suggested that evaluating crypto markets by taking into account the liquidity of the entire world rather than focusing solely on the United States could be more fruitful. For example, the Federal Reserve is becoming more restrictive (risk-averse). Still, the world’s third- and fourth-largest central banks are becoming more dovish, increasing global liquidity.

He went on to say that the conclusion of the “zero covid” policy in late 2022 would herald the beginning of China’s economic rebound. A string of lockdowns ended the tremendous boom that characterized China’s economy during the twenty-first century in 2022. This massive expansion defined China’s economy throughout the twenty-first century.