Just when we thought that there is going to be liquidity crunch due to balance sheet shrinking and interest in Western economies like the US and other European nations.
China is reopening it’s economy along with massive liquidity and potentially a rate cut as well.
Courtesy Bloomberg, we can see in the below chart how china is injecting record amount of liquidity into the system.
This also kind of explains the recent surge in risk assets like crypto.
China, too is definitely suffering with massive slowdown in the economy due to covid related restrictions and crisis in its real estate and maybe this is the reason the Chinese banks are adding this amount of liquidity. Or it may also be a tool to counter other economies measures to counter the inflation esp the west.
This space is worth tracking.