China Injects $1.1 Trillion to Ensure Banking System Liquidity

15 Nov 2025

China’s central bank, the People’s Bank of China, has announced a major liquidity support measure, introducing an 8,000 billion yuan (approximately $1.1 trillion) fixed-rate, multi-price reverse repo operation with a term of 182 days. The move is intended to maintain ample liquidity in the banking system amid maturing repo contracts and ongoing financial market pressures.

The central bank’s operation aims to ensure that commercial banks have sufficient funds to meet short- and medium-term obligations, supporting overall stability in the financial system. By adding incremental liquidity, the People’s Bank of China seeks to prevent funding shortages that could disrupt lending activities or create volatility in interbank markets.

In addition to this large-scale injection, regulatory authorities continue to focus on promoting lending to small- and micro-enterprises, which play a critical role in sustaining China’s economic growth. These firms often face challenges accessing capital, and enhanced liquidity measures, combined with regulatory oversight, are expected to support credit flow to these segments.

Financial analysts note that such measures are part of a broader strategy by Chinese authorities to maintain stability in the banking system while addressing structural challenges in the economy. By ensuring consistent liquidity and supporting targeted lending, China is aiming to balance economic growth with financial stability, particularly in sectors vital to employment and domestic consumption.

The central bank’s action reflects ongoing efforts to maintain confidence in the financial system amid a complex economic environment, characterized by slowing investment outside the real estate sector and moderate consumer spending growth. Observers expect that continued liquidity support, coupled with regulatory oversight, will help sustain credit availability, encourage investment in small- and medium-sized enterprises, and promote long-term financial stability across the country.