BEIJING (Reuters) – China’s central bank said on Friday it will continue to flexibly make use of a combination of tools to keep liquidity reasonably stable during the coming Lunar New Year holiday.
The People’s Bank of China will continue to use its medium-term lending facility (MLF) around the holiday that starts next week to supplement mid- and long-term liquidity, and also conduct reverse repos at appropriate times, a statement on its website said.
The central bank, in a separate statement earlier Friday, said it has released temporary liquidity worth almost 2 trillion yuan ($316.28 billion) to satisfy cash demand before the long holiday.
While liquidity always tightens at this time of year, China’s financial markets and policymakers have been more sensitive to risks of a cash squeeze since authorities began a clampdown on riskier forms of financing in early 2017.
The clampdown has led to occasional spikes in money market rates and bond yields.