PBOC Enlarges Liquidity Tool to Avoid China Holiday Cash Squeeze
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China granted small banks nationwide access to a short-term lending tool to help them cope with liquidity strains, especially during the Feb. 18-24 lunar new year holidays when Chinese withdraw cash to give as gifts.
The Standing Lending Facility, earlier limited to 10 provinces and cities, is now available nationwide for city and rural commercial banks, rural cooperative banks and rural credit cooperatives, the People’s Bank of China said on its website today. The move is meant to improve liquidity support to small lenders and “deal with seasonal liquidity swings before the Spring Festival,” the central bank said.