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China Set to Add Liquidity Support to Stave Off Cash Squeeze
China will probably add more cash into the financial system this week as the largest amount of policy loan in a year come due. Some market watchers also expect a near-term reduction in banks’ reserve requirement ratio. The People’s Bank of China will offer 950 billion yuan ($130 billion) through the medium-term lending facility Wednesday, according to the median estimate of 10 analysts in a Bloomberg survey. That would exceed the 850 billion yuan maturing this month. Most economists expect the one-year policy interest rate to remain unchanged at 2.5%. Liquidity conditions have tightened as a deluge of bond ... (full story)