China Unleashes Another Wave Of Liquidity To Prevent Cash Crunch

In mid-January, China’s central bank injected a record 1.03 trillion yuan in bank liquidity into the country’s financial system. At the time, policymakers claimed that heading into the Chinese Lunar New Year local banks were starved of liquidity like never before leading to fears of a cash crunch. This liquidity injection came via multiple reverse repos over several days, as the financial blog ZeroHedge described at the time: “On Wednesday, the People’s Bank of China put in a net 410 billion yuan ($60 billion) through open-market operations, the biggest daily “injection” on record. Despite this massive boost in liquidity, the…