China Boosts Cash Injection Amid Maturity Wall, Growth Risks
- PBOC raises cash injection to 50 billion yuan from 10 billion
- Cash operation should keep funding costs from rising: Citic
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China unexpectedly boosted the injection of short-term cash into the banking system as record amount of policy loans come due and Premier Li Keqiang flags challenges to the nation’s growth.
The People’s Bank of China added 50 billion yuan ($7.8 billion) in the financial system with seven-day reverse repurchase agreements, after injecting 10 billion yuan per day in the last two sessions. While the operation still led to a net liquidity drainage after considering maturities, it signals that authorities have grown concerned about a potential cash tightness in the coming weeks.