China's central bank injected 500 billion yuan of liquidity into the financial system through the MLF program, marking the largest injection in five months, to support the economy ahead of the Politburo meeting. The amount exceeded maturing loans, resulting in a net injection of 100 billion yuan. Combined with an earlier injection of 700 billion yuan through three-month and six-month reverse repo transactions at the start of the month, July saw a total medium-to-long-term liquidity injection of 1.2 trillion yuan, the highest level since February. Hui Shan, chief China economist at Goldman Sachs, estimates that the Politburo meeting is likely to signal further economic policy easing, with the government possibly accelerating the disbursement of existing fiscal measures, including an 800 billion yuan policy loan program.
Goldman Sachs Group IncGoldman Sachs economist quoted, signaling potential policy easing which could benefit financial sector