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China's central bank skips reverse repos

Xinhua News,BEIJING
2020-03-24 10:29

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The People's Bank of China, the country's central bank, skipped reverse repos for the 26th straight day on Tuesday, citing reasonably sufficient liquidity in the money market.

No reverse repos matured Tuesday.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

Facing potential economic shocks from the novel coronavirus outbreak, China's financial authorities pledged to pay more attention to policy flexibility to keep reasonably sufficient liquidity and release the potential of the loan prime rate reform.

Starting March 16, China's central bank implemented targeted reserve requirement ratio cuts for eligible banks, the second such cuts this year, which would release another 550 billion yuan (about 77.4 billion U.S. dollars) of liquidity into the market.

Other policy moves include the issuance of special reloans to provide preferential interest rate credit support to enterprises and the issuance of special bonds to provide sufficient funds to commercial lenders for supporting smaller enterprises.
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