SHANGHAI- China’s central bank supplied 14-day cash to its banking system for the first time in months on Monday and at a lower interest rate, signaling its intent to further ease monetary conditions.

The People’s Bank of China (PBOC) injected 234.6 billion yuan ($33.29 billion) into the banking system through open market operations, saying it wanted to “keep quarter-end liquidity adequate at a reasonable level in the banking system”.

The PBOC added 160.1 billion yuan via 7-day reverse repos at 1.70 percent , it said in a statement. It also injected 74.5 billion yuan via 14-day reverse repos at 1.85 percent, compared with 1.95 percent  during the previous injection.

Analysts said the funding operation in itself wasn’t a major policy easing. China has typically used 14-day repos to help the banking system tide over long holidays, and the last time it did so was ahead of a spring break in February.

Monday’s injection comes ahead of China’s National Day holidays starting Oct.1, and the cut in rates aligns the 14-day repo rate with the shorter 7-day repo rate which was cut in July.

“I wouldn’t take this rate cut as a signal that PBOC loosened monetary policy further,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

“Nonetheless, I do expect PBOC will cut 7-day repo rate as well as the reserve requirement ratio in the coming months. There is a press conference tomorrow when the financial regulators will shed light on their policy stance.”

The world’s second largest economy is battling deflationary pressures, and struggling to lift growth despite a series of policy measures aimed at spurring domestic spending. Speculation that it will hasten monetary easing perked up last week, after the US Federal Reserve kicked off its easing cycle with a hefty half percentage point rate cut.

The PBOC last cut its short and long-term benchmark lending rates in July.

Faltering Chinese economic activity has prompted global brokerages to scale back their 2024 China growth forecasts to below the government’s official target of about 5 percent .

President Xi Jinping urged authorities to strive to achieve the country’s annual economic and social development goals, state media reported earlier this month.

Goldman Sachs and Citigroup have lowered their full-year projections for China’s economic growth to 4.7 percent, after the world’s second-largest economy’s industrial output slowed to a five-month low in August.

Weak economic activity in August has ramped up attention on China’s slow economic recovery and highlighted the need for further stimulus measures to shore up demand.

The faltering growth has prompted global brokerages to scale back their 2024 projections to below government’s target of around 5 percent.

Goldman Sachs earlier expected full-year growth for the economy at 4.9 percent, while Citigroup had forecast growth at 4.8 percent.

China’s industrial output in August expanded 4.5 percent year-on-year, slowing from the 5.1 percent pace in July and marking the slowest growth since March, data from the National Bureau of Statistics (NBS) showed on Saturday.

Retail sales – a key gauge of consumption – rose 2.1 percent in August, decelerating from a 2.7 percent increase in July amid extreme weather and a summer travel peak. Analysts had expected retail sales, which have been anemic all year, to grow 2.5 percent.

“We believe the risk that China will miss the ‘around 5 percent’ full-year GDP growth target is on the rise, and thus the urgency for more demand-side easing measures is also increasing,” Goldman Sachs said in a note dated Sept. 15.

It maintained the country’s 2025 GDP growth forecast at 4.3 percent.

However, Citigroup on Sunday trimmed its 2025 year-end forecast for China’s GDP growth to 4.2 percent from 4.5 percent due to a lack of major catalysts for domestic demand.