China Set to Add Liquidity Support to Stave Off Cash Squeeze
- PBOC expected to inject more cash to meet maturity surge
- Reserve requirement ratio cut also expected to aid liquidity
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China will probably add more cash into the financial system this week as the largest amount of policy loans in a year come due. Some market watchers also expect a near-term reduction in banks’ reserve requirement ratio.
The People’s Bank of China will offer 950 billion yuan ($130 billion) through the medium-term lending facility Wednesday, according to the median estimate of 10 analysts in a Bloomberg survey. That would exceed the 850 billion yuan maturing this month. Most economists expect the one-year policy interest rate to remain unchanged at 2.5%.