China’s central bank increased liquidity on Wednesday, offering the banking system new funds for the first time this year to help meet seasonal demand ahead of the long holiday.
The People’s Bank of China injected 87 billion yuan (US$12.84 billion) through reverse repurchase agreements in open market operations, according to an online statement.
The central bank added that the move is to “maintain reasonably ample liquidity” in the banking system.
Market participants believe the cash infusion is to help offset demand ahead of the week-long Lunar New Year holiday, which begins on Jan. 21 of this year.
With 14 billion yuan of reverse buybacks due on Wednesday, the central bank injected a net total of 71 billion yuan on the day, making it the first daily net offering of funds this year.
(Reporting by Winni Zhou and Brenda Goh)
Source: CNN Brasil
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