The People’s Bank of China has provided cash to the market for the 10th consecutive month through major policy loans. This comes after the central bank announced a reduction in lenders’ reserve requirements in order to support the struggling economy. On Friday, the bank received an injection of 591 billion yuan ($81.2 billion) through a medium-term loan facility, resulting in a net injection of 191 billion yuan. The lending rate for the facility was kept unchanged at 2.5%, following a surprise 15 basis point cut last month. This injection of cash follows the central bank’s decision to reduce the cash lending requirements for cash lenders over a two-year period. Some estimates suggest that this move could free up to 500 billion yuan this year. The net injection of 191 billion yuan is higher than market expectations, according to Zhaopeng Xing, senior China strategist at Bank of Australia and New Zealand Group Ltd. He expects a further 10 bps (MLF) rate cut in the fourth quarter. The rate cut does not necessarily indicate new policy easing but rather is seen as a continuation of last month’s 10 basis point cut in seven-day loan costs. These actions by the People’s Bank of China reflect Beijing’s intention to accelerate rate cuts as the country’s economy begins to recover from deflationary pressures. Additionally, the funding support is needed by banks to meet regulatory requirements and seasonal demand associated with an increase in municipal bond issuance.