China's central bank pumped more short-term funds into the country's financial system on Saturday, as a surge in demand for cash ahead of the Lunar New Year holiday is starting to squeeze banks' liquidity.

Wary of a potential funding shortage as a result of the holiday, China's large banks in recent weeks have lobbied the People's Bank of China to significantly ease credit by reducing the amount of deposits they hold in reserve, according to banking executives. But so far, the central bank has resisted adopting such aggressive easing measures for fears that the move could add to the pressure weakening the Chinese currency, The Wall Street Journal reported on Jan. 24. Instead, the PBOC has opted for a series of short- and medium-term cash injections to ease the funding strain.