CNY During CNY: Hongbao Havoc

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Danielle Sumita
The ubiquitous red envelope may seem innocent enough, but accommodating a billion or so hongbao exchanges puts great pressure on the Chinese banking system. After experiencing several cash crunches in 2013, the People’s Bank of China very publicly injected 255 billion RMB (42 billion USD) into the system leading up to the holiday. You care, because the inflation this caused means your holiday (cash) bonus was just a touch undervalued.