The People's Bank of China is expected to further inject ample liquidity to fully meet market demand, which will help interest rates in China's money market gradually fall back to levels close to the central bank's open market operations, experts close to the central bank said on Tuesday.
Starting Wednesday, the end-of-month effect — whereby market interest rates tend to increase — will fade while the proceeds raised by government bond issuance will be converted into fiscal expenditures, experts said.
Market data showed that the PBOC has injected a large amount of liquidity through open market operations recently, with the outstanding amount of open market reverse repos reaching a record high of 2.69 trillion yuan ($367.7 billion) as of Tuesday.
