China provides big liquidity injection to banking system, keeps policy rate unchanged for now

China's central bank rolled over medium-term policy loans, providing 289 billion yuan of fresh liquidity to the banking system. This was the biggest such injection in nearly 3 years.

The PBOC kept the interest rate on 1-year policy loans unchanged at 2.50%, despite two previous cuts this year to lower borrowing costs.

Further monetary easing could put downward pressure on the yuan, which has already lost 5.5% against the dollar in 2022.

Analysts expect China to maintain an easing stance with another rate cut possible this month and a further cut to banks' reserve requirements in December.

The moves aim to aid China's struggling economy amid weak consumption, a property crisis, and liquidity stresses from upcoming tax collections and local government bond repayments.