Chinese New Year and Liquidity
In the runup to Chinese New Year, large amounts of money are withdrawn from Chinese banks to buy gifts or to be put into red envelopes. In anticipation of this year's withdrawal, the People's Bank of China pumped 450 billion yuan (about £45bn) into money markets via open market purchases in order to make sure there were enough reserves in the banking system and to hold down the interbank lending rate. This action was the biggest one-day liquidity injection ever made by a central bank! Click here to read more.
Happy Chinese New Year or Xīn Nián Kuài Lè!