PBOC pumps $4.8bn into banks to stem cash crunch

The central bank injected US$4.8 billion into China’s banking system with the hopes of ending a cash crunch that has intensified since late last week, Financial Times reported. The weighted average of the seven-day repurchase-agreement rate, a benchmark of how much banks charge to borrow funds from one another, rose to 8.94% on Monday from 8.21% Friday. That was the highest level since rates hit 9.29% June 21, at the peak of a previous cash crunch. The squeeze on liquidity has put the People’s Bank of China in a tough spot between reining in credit growth while also assuring banks and the market that cash will not dry up.