China injects USD 67 billion into financial system

China's central bank today injected 440 billion yuan (USD 67 billion) into the financial system in a bid to ease tight liquidity ahead of the Lunar New Year holiday when demand for funds surges.

Aforementioned injection through the regular open market operations of the People's Bank of China (PBoC) was the largest since 2013, Bloomberg News reported.

Chinese companies typically pay salaries and bonuses before the holiday, which falls in early February this year. People also traditionally exchange cash and gifts during the period, the French news agency France-Presse reports.

- It is standard practice for the PBoC to inject large amounts of liquidity into the banking system ahead of the Chinese New Year. If it didn't, the increased demand for cash during the holiday would cause liquidity conditions to tighten significantly and interbank rates would surge - the Capital Economics company said last week.

The PBoC last week flooded the financial system with more than 1.5 trillion yuan, AFP reminds.