PBOC’s Record Fund Injection Cements Dovish Stance for Markets
China’s central bank injected a record amount of funds into the banking system through longer-dated liquidity tools in January, reinforcing its commitment to monetary easing and supporting markets with ample liquidity.
The People’s Bank of China has pumped a net 1 trillion yuan ($144 billion) of medium to long-term liquidity into banks so far this month, the most on record, according to Bloomberg calculations. The measures included the 3-month, 6-month outright reverse repurchase operations, as well as the latest 1-year medium-term lending facility .
The increase in funding supply, along with recent comments from PBOC officials about room for , underscore continued monetary policy support for an economy still struggling with domestic demand. Cash demand at banks is also expected to rise ahead of the Lunar New Year holiday in mid-February.
“The injections are crucial for ensuring ample liquidity ahead of the Spring Festival holidays,” said Ming Ming , chief economist at Citic Securities. “The intention is clear: to signal a dovish policy stance and stabilize market sentiment.”
The liquidity support followed comments by PBOC officials at a last week, stating that monetary policy will stay moderately loose this year and that there is room for cuts in both interest rates and banks’ reserve requirement ratio (RRR). PBOC Governor Pan Gongsheng reiterated the easing pledge in an with Xinhua News published on Thursday.
The central bank’s messages have helped domestic government bonds recover. Yields on 30-year sovereign bonds have dropped about five basis points this week, driven by expectations of PBOC easing while the stock rally moderated .
With the PBOC starting 2026 with easing measures, analysts expect broader steps to follow later in the year.
“We expect RRR cuts by 25 basis points each in the first and the second quarter,” said Serena Zhou , economist at Mizuho Securities, adding that the first reduction is likely after the National People’s Congress meeting in March.
