In an effort to rescue Chinese property company Evergrande that turned out to be on the brink of default, the country's central bank was forced to push almost a trillion yuan of funds into the banking system in just a week. The rush of short-term liquidity came as policymakers in China sought to support the national economy. Its growth was dragged down by a housing market slump, electricity shortages, fresh lockdowns, and severe traffic congestion at major ports.
Later, the People's Bank of China announced that it had injected another 200 billion yuan worth of seven-day reverse repurchase agreements into the banking system. Thus, for the fifth day in a row, the Chinese central bank has been pumping liquidity at the fastest pace since the beginning of the year - about 200 billion yuan a day. In total, the net injection over the week amounted to 940 billion yuan (including repayments), reaching the highest level since January 2020. As a result, the amount of cash pumped into the economy by China’s central bank ($148 billion) surpassed the corresponding amounts in the United States and Europe put together.
