China injected short-term cash into the financial sector, a sign that the authorities are seeking to calm the market nerves, according to a report by Bloomberg.
- The People’s Bank of China injected 90 billion yuan ($14 billion) of funds on a net basis through seven-day and 14-day reverse repurchase agreements on Friday, the most since February.
- The operation comes as the crisis facing Evergrande increases concern over the health of the country’s real estate and credit markets.
- Seasonal spike in demand for cash is also adding stress as banks are becoming less willing to lend toward quarter-end as they anticipate regulatory checks.
- China’s liquidity also tends to deteriorate at this time of year in the run-up to a one-week holiday at the start of October.
Concern over Evergrande coincides with a slowing Chinese economy. Aggressive movement controls installed to control Covid-19 outbreaks have hurt key sectors, as the measures to cool property prices have hampered the economy. CSI 300 Index up +1.00%, CNY USD +0.04%.