PBOC adopts mid-term credit tool as old benchmark fades away - BBG

Bloomberg carries a story this Tuesday, citing that the Chinese central bank (PBOC) is increasingly managing the flow of credit with more finely-tuned instruments than its old methodology.

Bloomberg reports, “With the new tool playing its part in stabilizing the economy -- data Friday is estimated to show a 6.7 percent expansion for 2016 -- the People’s Bank of China is switching its focus to risk management. Another advantage of targeted lending: it adds funds without signaling broad easing that adds to downward pressure on the yuan and fuels further capital flight.”

According to Tommy Xie, an economist at OCBC Bank in Singapore, “The mid-term lending program is the central bank’s way of adapting as the economy evolves.”