China adds $58 billion into banking system as Lunar New Year draws near

China adds $58 billion into banking system as Lunar New Year draws near

China added liquidity to the financial system on Wednesday in attempts to offset a money shortage ahead of the Lunar New Year holiday. Interest rates on the loans were left unchanged.

The People’s Bank of China added 300 billion Yuan ($44 billion) through the medium-term lending facility at 3.25%, according to the central bank’s statement. It also injected an additional 100 billion Yuan through market operations after a 15-day hiatus.

Around 257.5 billion Yuan worth of targeted medium-term loans will come on January 23. Traders had been expecting a liquidity injection before the week-long holiday and some said the decision to keep interest rates was a slight disappointment. Bond futures pared an earlier advance after the announcement while the CSI 300 Index of Chinese shares dropped as much as 0.9%.