PBOC May Inject Liquidity to Avoid Holiday Shortage: Journal

The PBOC may inject liquidity through the contingent reserve arrangement (CRA) and the temporary liquidity facility (TLF) to curb surging funding rates before the Lunar New Year, China Securities Journal reported citing Yang Yewei from Guosheng Securities. China's funding rates have risen sharply on tight liquidity after net fund drains by the PBOC in the past week, the newspaper wrote. The PBOC may hope to avoid excessive rises in asset prices through controlling liquidity, the newspaper reported citing analysts. The PBOC might also see decreasing cash demand after policies halting the annual holiday migration due to pandemic control, the newspaper said.