PBOC Seen Keeping Liquidity Ample through Feb: Securities News

The PBOC is likely to keep liquidity ample to ensure a stable economic recovery and help banks control debt-servicing costs by renewing MLF and reverse repo purchases, the Shanghai Securities News said on Saturday citing Yan Se, an economist from Founder Securities. While the central bank kept the November LPR unchanged, loan-servicing rates for businesses are likely to further decline, the newspaper said citing analyst Wang Qing of Golden Credit Rating. Extraordinary policies introduced through the pandemic will only be withdrawn slowly over the next two years to avoid impacting on the real economy, Yan said. However, there may be some adjustments to rates and liquidity should the first quarter next year see a significant improvement in economic indicators, and if the demand for credit surges due to the risk of a capital market bubble, the newspaper reported citing Yan.