Chinese central bank has reportedly pumped $18.6bn (CNY120bn) into the banking system to address concerns raised by the Evergrande crisis.

The People’s Bank of China (PBoC) is providing the funds through reverse repurchase agreement that will result in net injection of CNY90bn, Bloomberg reported.

Eugene Leow, a senior rates strategist at DBS Bank in Singapore, told the publication that the “the PBOC’s net injection is probably aimed at soothing nerves as the market worries about Evergrande.”

“While the aim may be to instill discipline, there is also a need to prevent contagion into the real economy or to other sectors,” Leow noted.

Evergrande is a real estate developer in China with over $300bn in debt. Last week the firm said that it may default on its debt.

The news shook markets around the world. However, analysts are of the opinion that Evergrande won’t lead to Lehman-like moment from 2008.

Notably, Evergrande’s onshore unit stated that it has come to terms with bondholders to repay interest due on 23 September 2021.

It plans to make interest payment for its 5.8% 2025 security.

As per the data compiled by Bloomberg, the amount due for coupon was $35.92m (CNY232m).

Commenting on the latest liquidity boost, Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered in Hong Kong, said that it will not be enough to address the Evergrande crisis.

“What the market hopes the government will do is to come up with a plan that can help the company restructure and refinance in a smooth way,” Shuang was by Bloomberg as saying.

“China’s bottom line is that it won’t allow the Evergrande issue to turn into a full-fledged financial crisis or let it trigger any systemic risks,” he added.