China's central bank has confirmed that it had pumped more money into the country's banking system, amid pressures to boost economic activity and address the ongoing growth slowdown.
In its third-quarter monetary policy implementation report, the People's Bank of China (PBoC) disclosed the details of the newly launched innovative policy instruments, such as "medium-term lending facility" (MLF).
MLF is quite similar to reserve requirement ratio (RRR) cuts, as it allows "conditional rollover" of funds.
The bank said it has conducted MLF operations totalling 769.5bn yuan ($125.9bn, £79bn, €100.9bn) in September and October towards different tiers of commercial banks.
The MLF operations so far are equivalent to a 75-basis-point cut to the RRR, according to economists at ANZ bank.
The MLF was priced at 3.5% for three-month tenor, resulting in a 30-basis-point decline in the three-month Shanghai interbank offered rate (SHIBOR) to 4.4% since August.
Despite several rounds of monetary policy easing, the weighted average borrowing rates surprisingly picked up by 0.1percentage point to 6.97% by the end of third quarter, reflecting risk-aversion sentiment among commercial banks owing to rising credit risks.
"China's central bank will intensify the effort to lower the cost of funds facing the real economy, and more innovative policy instruments could be used to experiment the interest rate transmission mechanism amid financial liberalisation reform," said ANZ bank economists.
"In this sense, an adjustment to RRR and policy rates will be unlikely for the remainder of this year."
China has been promising lower funding costs for companies, as growth continues to slow down in 2014 and domestic firms struggle to get access to bank loans.
In the third quarter of the year, China's economy expanded by 7.3%. While this beat analysts' forecasts of 7.2%, it represents the slowest expansion for more than five years after China reported a 6.9% growth in the first quarter of 2009.
The growth rate is expected to decline further in the fourth quarter, despite a number of stimulus measures by the government.