China's central bank issued $81.3 billion in short-term loans

China's central bank has provided the country's banks with 541 billion yuan, or roughly $81.3 billion, in the form of overnight loans. At the same time, the bank has also made a change to its interest rate policy.

From now on, the 1.25% rate on overnight loans will be one of the central bank's key benchmarks. Such short-term loans will be offered to banks on a daily basis, with securities accepted as collateral.

According to analysts' estimates, the change will make short-term borrowing cheaper for banks and could also reduce bond yields, though this does not signal a cut in the benchmark interest rate.

The decision comes amid debt-related problems in China's real estate sector. Citi does not expect a cut in the benchmark lending rate in November and sees the possibility of more significant changes starting from 2027.

Source: Reuters