PBOC to Keep Liquidity Sufficient though RRR Cuts Unlikely: Herald

The PBOC may intend to ensure sufficient liquidity to fully meet the demand of financial institutions, as it rolled out the matured medium-term lending facility yesterday with the same amount, higher than market expectation, the 21st Century Business Herald reported citing Zhang Xu, chief analyst of Everbright Securities. The probabilities of cutting RRRs or MLF rate may however be low, the newspaper cited Zhang as saying. PBOC's officil comment of "no big gap in the base money" last week has dispelled the market's expectation of a RRR or rate cut by the end of the year, the newspaper said. The MLF operation yesterday further dampened rate cut expectations, though it indicates the PBOC supports moderately loose liquidity in the medium and long term, which will help to further reduce the financial cost of the real economy, the newspaper said citing Wang Qing, chief analyst with Golden Credit Rating.