China Set to Skirt Lunar New Year Cash Crunch on PBOC Injection
- Liquidity to be less tight due to PBOC’s financial injections
- Drop in cash demand by clients should ease funding pressure
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Chinese traders can likely write off an imminent cash squeeze from their list of worries, as banks look to have plenty of funds to lend around the upcoming Lunar New Year holiday.
China’s money market is usually at risk of a dry up in funding before the annual one-week break, as bank customers take more cash out than normal for gifts and travel. But the chance of a squeeze is smaller this year, with Beijing set to pump 1 trillion yuan ($139 billion) into the financial system on Monday to help bolster the economy and Chinese people spend less amid a weak recovery.