PBOC: Liquidity injection shows determination to stabilise market expectations and restore market confidence

Dhwani Mehta FXStreet

Following the injection of funds via Reverse Repos earlier on Tuesday, the People’s Bank of China (PBOC) is out with a statement, emphasizing the need for more liquidity injections, in the face of China’s coronavirus outbreak.

Key Quotes:

Liquidity injection via open market operations shows determination to stabilize market expectations and restore market confidence.

Larger than expected liquidity injection pushes money market and bond yields down.

Liquidity injections will lower financing cost and ease financial pressure on small, micro-businesses.

The above comments have little to no impact on the market mood, as a sense of caution prevails, with an increasing coronavirus death toll in China and outside the mainland.

USD/JPY holds steady near 108.70 while the Asian equities attempt a recovery after Monday's tumble.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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