China Central Bank Boosts Cash Injection to $16 Billion on Looming Maturity

(Bloomberg) — China further increased its injection of short-term cash into the banking system amid concern that a large policy loan maturity this month would tighten liquidity conditions.

The People’s Bank of China added 100 billion yuan ($16 billion) of funds into the banking system with seven-day reverse repurchase agreements. That’s after it injected 50 billion yuan each in the previous two sessions from 10 billion yuan before.

The demand for liquidity is expected to rise later this month, as lenders need to repay a record 1 trillion yuan of medium-term policy loans coming due while also setting aside cash to buy debt sold by local governments.

Contact editor Michael Bellart (michaelbellart@caixin.com)

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