PBOC appears to be ramping up housing & infrastructure financing to support the economy

<p>Bloomberg carry the report on the People’s Bank of China (PBOC) injecting nearly US$50 billion worth of low-cost funds into policy-oriented banks in the final month of 2023. </p><p>This suggests the Bank may be ramping up financing for housing and infrastructure projects to support the economy.</p><p>Bloomberg detail the addition of funds:</p><ul><li>outstanding amount of the PBOC’s Pledged Supplemental Lending (PSL) programme to policy banks climbed to 3.25 trillion yuan (S$602.5 billion) at the end of December from 2.9 trillion yuan in the previous month</li><li>net injection of 350 billion yuan was the largest increase via the tool since November 2022 </li></ul><p>—</p><p>The PSL programme is seen as an important tool, funds can be used to shore up the property sector and stabilise growth</p><ul><li>money could drive construction of public housing, helping to revive the property slump; the slumpo had fed into a negative feedback loop sapping consumer confidence</li></ul><p>Adds Bloomberg:</p><ul><li>The PSL tool was last used heavily between 2014 and 2019 for the rebuilding of shantytowns. That helped to halt a property slump but at the same time inflated home price bubbles. Some economists called it “helicopter money” or “Chinese-style quantitative easing” back then. </li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.