Move aimed at avoiding cash crunch as depositors withdraw money for Spring Festival spending

The central bank on Monday night expanded a new support tool to cover smaller financial institutions, days ahead of the Lunar New Year holiday, when interbank liquidity tends to run low as depositors withdraw cash.

Analysts believe the move marks the People's Bank of China's latest effort to avoid a repeat of the cash crunch that occurred last June, as well as providing greater liquidity to the nation's big lenders through a new tool unveiled on Monday when money market rates rose.