The People’s Bank of China will inject more than 600 billion yuan, more than $91 billion at current exchange, into its country’s financial system to loosen liquidity ahead of the Chinese New Year holiday.
The funds will be made available by providing shorter maturity loans to banks via operations, such as the standing lending facility, medium-term lending facility and pledged supplementary lending, according to a statement on the PBOC’s Web site posted Tuesday night.
This year’s Chinese New Year’s day falls on Feb. 8 and is accompanied by a weeklong holiday. Liquidity often tightens at this time of year and it has become standard practice for the PBOC to supply a cash injection to keep rates steady prior to the holiday season.
The central bank has already cut interest rates six times since November 2014, and reduced the amount of cash that banks must hold as reserves, but these steps haven’t done a lot to stimulate a growth slowdown.
The news comes on the back of an expected poor showing for the country’s GDP in the fourth quarter of 2015, with growth slipping to 6.8 percent.
More easing steps are widely expected from PBOC policy markers over the next few months.
A weakening yuan and lower family income growth are seen as potential dangers to Chinese tourism.