China’s central bank injected 1.3 trillion yuan into the banking system this week—its largest short-term liquidity boost since January—to ease funding pressure from heavy tax payments and a surge in government bond issuance.
The injections peaked at 444.6 billion yuan on Wednesday before moderating to 102.8 billion yuan on Friday, with repo rates falling for three straight days, indicating the measures are successfully relieving market stress.
The move comes as funding conditions tighten, with repo rates rising above the policy rate amid weak consumer sentiment and fragile export prospects. Analysts expect liquidity support to taper after the July 15 tax deadline.
