The People’s Bank of China announced on Tuesday evening it would inject over RMB600 billion of liquidity into China’s financial system to head off an expected liquidity squeeze ahead of this year’s Lunar New Year holiday, which begins on February 8, Reuters reported. Liquidity often tightens ahead of the week-long holiday, and the central bank normally injects cash into the banking system to keep rates steady. “The liquidity injections may lower the urgency for cutting bank reserve ratios in the near term,” said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai. “This reflects the central bank’s intention to keep liquidity ample by using flexible policy tools.”
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved