(Bloomberg) — China’s central bank on Thursday refrained from immediately following the federal government Reserve in raising borrowing costs.

The People’s Bank of China has been widely expected to respond to the U.S. hike by lifting the fee for reverse-repurchase agreements with the second time this coming year, following three increases in 2019.

“It appears to be the PBOC decided that growth is slowing and inflation is low and well below target, while money market minute rates are relatively high in order that they don’t prefer to boost them further,” said Dariusz Kowalczyk, senior emerging-market strategist at Credit Agricole (PA:CAGR) SA in Hong Kong.

Chinese equities were boosted through the news. The Shanghai Composite Index erased a loss of revenue of 0.5 % to 0.3 percent, while the ChiNext gauge of small caps and tech stocks led gains, climbing 0.9 percent. Government bond futures also rallied, with active 10-year contracts spiking 0.45 percent, one of the most since April 18 — the next day the PBOC cut reserve requirement ratio. The yield on sovereign notes due in a decade was little changed at 3.68 percent at the time of 10:10 a.m. in Shanghai.

Read More: ‘Plain English’ Powell Cheerleads U.S. Economy After Rate HikeSee Also: Hong Kong’s Fed-Pacing Rate Hike Signals Reckoning Still to Come

China has become looking to ensure liquidity supply to cushion any economic slowdown and help lenders meet repayment obligations. It boosted injections via Medium-term Lending Facility yesterday towards the most in many over a year to assist smaller firms, during April it cut the RRR by 1 percentage point, citing the same goal. The central bank hasn’t changed the benchmark one-year lending rate since October 2019.

To contact Bloomberg News staff due to this story: Tian Chen in Hong Kong at tchen259@bloomberg.net;Helen Sun in Shanghai at hsun30@bloomberg.net;Yinan Zhao in Beijing at yzhao300@bloomberg.net

To contact the editors liable for this story: Richard Frost at rfrost4@bloomberg.net, ;Jeffrey Black at jblack25@bloomberg.net, Will Davies

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