China’s Central Bank Pumps In $25 Billion To Boost Liquidity

China Central Bank
China’s central bank has injected a whopping 163 billion yuan into 20 financial institutions to ease liquidity strain in the world’s second largest economy, currently witnessing sluggish growth. The People’s Bank of China on Friday pumped 163 billion yuan (about $25 billion) into the financial system in open market operations via medium-term lending facility (MLF), the official Xinhua news agency reported on Sunday. The MLF is a liquidity tool the PBOC introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank by using securities as collateral. The fresh funds were injected into 20 financial institutions, according to the PBOC. MLF worth 110 billion yuan had been due on the same day, the report said. China’s economy grew 6.9 per cent in 2015, the slowest since 1990, and capital has been flowing out of the country due to worries over flagging growth, causing the yuan to weaken. China’s foreign exchange reserves also dropped $99.5 billion to $3.2 trillion in January.

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