China Cash Squeeze Eases as PBOC Adds 1 Trillion Yuan in 3 Days
- Overnight repo rate falls most in two weeks after injection
- Squeeze caused by higher loan demand amid economic recovery
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China’s cash squeeze eased, with a gauge of overnight funding costs dropping the most in a week, after the central bank injected some $150 billion into the financial system over three sessions.
The overnight repurchase rate, an indicator of short-term borrowing costs in the interbank market, slumped more than 40 basis points to 1.86%. On Friday, the People’s Bank of China injected a net 180 billion yuan ($26.5 billion) via seven-day reverse repurchase agreements, taking the total amount to more than 1 trillion yuan in three days.