China Steps Up Cash Support as Growth Recovery Mops Up Liquidity
- PBOC injects a net $41 billion while keeping rate unchanged
- Latest data suggests nation’s growth recovery is on track
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China injected the biggest amount of cash to its financial system in more than two years via medium-term loans, as a surge in demand for credit as the economy recovers boosted the risk of a liquidity squeeze.
The People’s Bank of China added a net 281 billion yuan ($41 billion) via its medium-term facility this month, the most since December 2020. The move comes as a gauge of short-term borrowing costs climbed back toward a two-year high, a reflection of tighter liquidity conditions in the interbank market.