China injects liquidity ahead of holiday

China's central bank injected short-term liquidity into the country's large commercial banks on Monday to ensure the stability of the country's monetary market ahead of the Spring Festival. The People's Bank of China (PBOC) said in a posting on Sina Weibo, Chinese version of Twitter, that it did so through Standing Lending Facility, a tool created by the PBOC to provide a large amount of funding to banks when they face a liquidity squeeze. The PBOC did not specify the exact amount of the liquidity injection, but added it will continue to provide short-term liquidity support via reverse repurchase (repo) on Tuesday. The central bank has not injected funds through reverse repos since December 24, 2013. It also urged financial institutions to strengthen liquidity and asset management to safeguard monetary market stability before the Spring Festival, which falls on Jan. 31 this year. The Spring Festival, or Chinese Lunar New Year, is the country's most important traditional holiday for family reunions. Ahead of the holiday, commercial banks usually have to increase cash supply to meet the needs of surging consumption around the holiday.