MNI SOURCES: PBOC May Slow Pace of............>

CHINA: MNI SOURCES: PBOC May Slow Pace of Liquidity Easing

Room for the People's Bank of China to further loosen monetary policy appears

limited as inflationary pressures pick up, the yuan weakens and the deleveraging

campaign continues, MNI understands from talks with people familiar with PBOC

operations.

- Additionally, the sources note, the current easing policy has not yet produced

the expected results, as liquidity has yet to reach its intended target. "The

market will not see the extreme liquidity easing enjoyed in early August," a

source close to the central bank told MNI.

- "As long as the PBOC stops injections, the market will feel tight,

particularly when banks are big buyers of big newly-issued government bonds," a

second source said.

- For the full piece, please see MNI Main Wire at 07:50 08/23 BST or contact us.