Chinese Central Bank Injects More Iiquidity into the System

Chinese central bank injects more cash into the system as bank hoard cash for regulatory checks

The People of China (PBOC) added 200 billion yuan of cash into the financial system through 7-day reverse repurchase agreements, more than offsetting the 10 billion yuan coming due.

The central bank move comes after short-term borrowing costs soared the most in a year on Monday which shows a sign of liquidity shortage int the interbank market.

“The big amount of injection will help to alleviate liquidity pressure,” said Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group told Bloomberg. “It is necessary to help the financial institutions to move cross the year-end smoothly.”

China tend to face liquidity crunch towards the end of the year as bank hoard cash to prepare for regulatory checks.

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