The People’s Bank of China (PBOC) injected nearly $50 billion worth of low-cost funds into policy-oriented banks last month, suggesting that the central bank may be ramping up financing for housing and infrastructure projects to support the economy.

The outstanding amount of the PBOC’s Pledged Supplemental Lending programme to policy banks climbed to 3.25 trillion yuan at the end of December from 2.9 trillion yuan in the previous month, the central bank said in a Tuesday statement. The net injection of 350 billion yuan was the largest increase via the tool since November 2022.

The PSL programme is seen as an important tool in Beijing’s arsenal, which the government can use to shore up the property sector and stabilise growth this year. Markets have been expecting the central bank to use the money to drive construction of public housing in a bid to alleviate a multi-year property slump that’s hammered consumer confidence.

The Bloomberg News had reported in November that policymakers were planning to provide 1 trillion yuan in low-cost central bank funding in phases to help programmes focused on affordable housing and renovation of urban villages. Officials were considering using the PSL programme or special loans.

“The PSL programme is the most direct and efficient way to transmit funds to the economy,” said Xing Zhaopeng, a senior China strategist of Australia & New Zealand Banking Group. “It will be significant to the economy if its size can expand” from the reported 1 trillion yuan, he said.