The Chinese central bank has injected a record amount of money into the financial system this week to alleviate a cash crunch that had driven up borrowing costs.

The People’s Bank of China has poured 365 billion renminbi (€45 billion) into money markets over the past three days through reverse repurchase agreements, the largest weekly amount in history.

The huge dose of cash was effective immediately, causing the seven-day repurchase rate, a key gauge of interbank liquidity, to fall a full percentage point from its three-month high of 4.75 per cent earlier in the week.

With the economy grinding to its slowest growth in three years, analysts and investors have been looking to the central bank to intensify its monetary easing by cutting the portion of deposits commercial banks must hold in reserve.

The central bank had confounded those expectations, relying almost exclusively recently on its open-market operations, especially reverse repos, to ensure there was enough money flowing through the financial system.