China Watch: Chart book series #200: PBoC liquidity injections; eased new home sales

Research evidence excerpt

China Watch: Chart book series #200: PBoC liquidity injections; eased new home sales

y in June (vs. -2.2% in May, Exhibit 16). The weekly new home sales in major cities HPR: Home purchase restrictions

also signaled a moderation in housing activities recently (Exhibit 14). Of the LGSB LNY: Lunar New Year

issuance, it accelerated in 2H June at a pace close to previous years’ level (Exhibit 13). In PBoC: People’s Bank of China

OMO: Open market operation2Q, 48% of LGSB issuance was allocated to infrastructure projects, while 11% was IPP: Independent power plant

directed to land reserves. The usage pattern was largely similar to that of last 2Q MoF: Ministry of Finance

(Exhibit 17). NBS: National Bureau of Statistics

LNY: Lunar New Year

PBoC net injected liquidity via MLF and repos in June MLF: Medium-term lending facility PSL: Pledged supplementary lending

On a monthly basis, PBoC net injected RMB905bn in June, reversing the net withdrawal DR007: 7-day depository institutions

since March. However, most of the liquidity support came through MLF and short-term pledged repo rate

reverse repos, with no meaningful injections via PSL or other structural monetary policy

Related reports linkstools (Exhibit 1). Despite the sizeable liquidity injection, DR007 continued to track

China Watch: Chart book series #199:closely with the 7-day OMO rate and did not move meaningfully lower (Exhibit 19).

Improved holiday tourism; narrowed

Exhibit 1: PBoC net injected RMB905bn in June (vs. net outflow of RMB381bn in May) fiscal spending decline

PBoC liquidity net injection from monetary tools (2025-26)

RMB bn 7d Reverse Repo Other Reverse Repo MLF Net purchase of govt bonds Cash Management SLF

2,000 PSL Structural monetary tools RRR injection 1,500

1,000 Total net injection

-5000

-1,000

-1,500