People’s Bank of China offers 200b yuan liquidity to banks

China provided medium-term funds to lenders on Thursday, giving banks some relief after its cash drainage last month triggered the country’s worst liquidity squeeze since 2015, Bloomberg reports.

The People’s Bank of China offered 200 billion yuan (US$31 billion) of one-year liquidity with its medium-term lending facility, according to a statement. That helped offset the loans that mature this month. It kept the interest rate on the funds unchanged at 2.95 percent.

How China’s central bank balances support for an uneven economic recovery without fueling excessive speculation is a key driver of investor sentiment. Traders were rattled by January’s liquidity squeeze when the PBOC withdrew cash from the financial system for the first time in six months, but authorities have drip-fed funding since then to calm money markets and suppress interest rates.