China halting cash drainage for Party Congress; may boost market sentiment

The cash cushion could boost market sentiment dented by Beijing's adherence to its Covid Zero policy and the crippling slump in the housing market

China may refrain from draining cash via medium term loans for the first time in three months as authorities seek to boost market confidence during the Communist Party’s twice-a-decade leadership congress next week.

Six out of eight economists and analysts in a Bloomberg survey expect the People’s Bank of China to offer at least 500 billion yuan ($69 billion) of one-year medium-term lending facility on Monday, as half a trillion yuan of policy loans mature this month. That’s after a withdrawal of 200 billion each in the last two months. 

The cash cushion could boost market sentiment dented by Beijing’s