China’s central bank injects liquidity to avoid Lunar New Year crunch

BEIJING - With China’s Lunar New Year starting next week and cash demand for year-end bonuses increasing, the People’s Bank of China has injected RMB160 billion (US$25.6 billion) through 14- and 21-day reverse repurchase arrangements (where the bank purchases securities from banks) at respective interest rates of 4.1% and 4.4%.

In total, these transactions mean that the PBoC has injected a net RMB205 billion into China’s financial system, the largest one-week liquidity injection in China since January 2014.

Adding to the holiday pressure on banks is a series of initial public offerings that are tying up enormous fund sources. www.webershandwick.cn (ATI).