China Escalates Cash Injection Ahead of Golden Week Holiday
- PBOC added 868 billion yuan via OMO this week, most since 2019
- Stability is paramount ahead of party meeting: Maybank
People pose for photos in front of an installation celebrating the upcoming National Day and the 20th Communist Party Congress at Tiananmen Square in Beijing, on Sept. 29.
Photographer: Jade Gao/AFP/Getty Images
China bumped up its injection of short-term liquidity by more than nine times this week, signaling its resolve to avoid a cash squeeze during the Golden Week and in the run-up to the Communist Party’s twice-a-decade leadership summit.
The People’s Bank of China net injected 868 billion yuan ($122 billion) into banking system via reverse repos this week, the most since January 2019. That’s after a net injection of 92 billion yuan in the previous week. Quarter-end and Golden Week holidays next week may have played a part in the PBOC’s decision to boost liquidity, according to Maybank Securities Pte Ltd.