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China to inject $65bn into banking system

In an effort to pump more cash into the banking system, the People's Bank of China (PBoC) is pumping about CNY400bn ($65bn) through China Development Bank.

PBoC

PBoC lent around CNY400m in the interbank market on Wednesday, reports Dow Jones Newswires.

This move comes following a CNY500bn injection into the country’s five biggest state-owned banks in September. These loans are set to be due this month.

According to people with knowledge of the matter, the country is indicating its readiness to step in when liquidity is short and seeks to help its banks in a bid to reinvigorate slowing growth.

The country also risks missing its economic growth target, which is set at about 7.5% for 2014.

The fund injections made so far by China are considered as a short-term effort to improve growth.

The PBOC has not disclosed the fund injection over fears that public may perceive that it is easing the monetary policy, sources told Dow Jones Newswires.

In order to strengthen their abilities, Chinese banks have been urging the central bank to free up more funds.

Established on 1 December 1948, The People’s Bank of China is the central bank of the People’s Republic of China with the power to control monetary policy and regulate financial institutions in mainland China.


Image: The People’s Bank of China Head Quarters in Beijing. Photo: courtesy of Yongxinge