🇨🇳 china's central bank uses USD value as a key driver in economic policies #1

🇨🇳 china's central bank uses USD value as a key driver in economic policies the monetary easing policy is adjusted by PBoC based on the dollar's trend - up or down weaker USD + expected liquidity USD injections = Yuan/renminbi injections

weaker USD + FED rate cuts & QE allow China to print Yuan/renminbi without a capital runoff easing monetary conditions in the US means more capital in circulation globally - not just in PRC thus, relative inflation is kept under more control 🇨🇳🇺🇸 china's CPI is below US's ⬇️

🇺🇸🇨🇳 USA & China are the global liquidity drivers in financial markets since 2000, each injected ≈$6 trillion of public money into markets. that's ≈40% of global liquidity 🤯 in 2025 - China is leading with injections

🇨🇳 china injects liquidity mainly via reverse repurchase agreements 🏦 chinese central bank buys government bonds from commercial banks, selling them back later. this new cash is re-invested yielding a spread 💹 essentially, they allow banks to earn a yield on their bonds

🇨🇳 PBoC provides commercial & policy banks with liquidity via reverse repo open market operations this MASSIVE liquidity eventually flows out of china into the global economy so it has a very direct effect on asset prices wherever your are 😄