The Chinese central bank pumped more liquidity into the markets on Wednesday. In a statement, the PBOC said the action is designed to stabilize investment sentiment.
A total of 140 billion yuan was injected into the interbank money market through short-term liquidity operations. The loans will mature in six days and have an average interest rate of 2.3 percent.
Analysts say the authorities are using open market operation to ease liquidity squeeze, and bolster capital supply for the real economy.
They also say the government would use fiscal tools to prompt growth, and gradually pull back monetary easing expectations.
The central bank launched SLOs to expand its monetary policy tools. The facility is usually used to provide one-to three-day direct lines of credit to commercial lenders.