China injects $71bn to boost markets

October 10, 2024 (MLN): In a bold move to revive its slowing economy, China's central bank unleashed $71 billion in liquidity on Thursday, aimed at boosting market confidence and spurring stock purchases.

The injection is part of a broader effort by Beijing to stabilize its financial markets and support firms amid lingering economic challenges, according to a report by APP.

Authorities last month unveiled several stimulus policies from interest rate cuts to relaxing home-buying rules after struggling since the end of Covid restrictions to reignite growth and get business activity back on track, it added. 

The news lit a fire under mainland and Hong Kong equities on renewed hopes that officials would finally get a grip on the issues that have dogged the economy for years, particularly a property debt crisis and tepid consumer spending.

That euphoria was dampened Tuesday as a much-anticipated news conference ended with just a pledge to meet the country's annual growth target but no more measures and no detail on those already announced.

Companies will be allowed to use equities, bonds and other assets as collateral for "high-grade liquid assets such as treasury bonds and central bank bills.

The programme may be "further expanded depending on the situation", it added.

Shanghai shares rose more than 1% in early trade and Hong Kong added more than 2%. 

The measures were first announced last month alongside a raft of stimulus measures that triggered a blistering rally that sent markets up more than 20%.

Copyright Mettis Link News