On January 29, 2016 morning, the People’s Bank of China (PBoC) made a highly unusual injection in addition to injecting a net Rmb 690bn ($105bn) into the banking system this week through open market operations — the largest single-week injection on record. Normally the PBoC conducts such operations only on Tuesday and Thursday, but the central bank said on January 28, that it would increase the frequency of its cash injections uptill February 19. The central bank needs to avoid fuelling further renminbi weakness and capital flight through excessive easing while at the same time, creating new money to replace the liquidity drained from the system through capital outflows in order to ensure loans keep flowing to the real economy.In a meeting with commercial banks last week leaked to local media, the PBoC said it was unlikely to enact further cuts to the required reserve ratio (RRR), which sets the portion of deposits that banks must hold in reserve at the central bank where they are unavailable for lending.