This week, the People's Bank of China poured 868 billion yuan ($122 billion) into the country's banking system. By comparison, last week the injections amounted to only 92 billion yuan. Such a volume of pumped liquidity into the country's banking system has become the highest since January 2019, which is equivalent to a weekly increase of 843%. Large cash injections this week coincided with the summit of the leaders of the Communist Party, which is held twice a decade and is scheduled for next month. In addition, China's national currency is currently experiencing the weakest period in almost 30 years (the current exchange rate of the yuan is 7,1150). However, the measures applied only exacerbate the downward pressure on the yuan. Analysts note that since the beginning of the year, the currency has lost more than 11%. Previously, the People's Bank of China refrained from raising the base rate, but only lowered it to stimulate growth in an economy suffering from COVID-19 restrictions, the real estate crisis and supply chain problems.
