The People's Bank of China, China's central bank, conducted 20 billion yuan worth of 7-day reverse repos in Thursday's open market operation, terminating seven straight sessions of 10 billion yuan reverse repos sales after the central bank cut both the benchmark interest rates and required reserve ratio (RRR) in October.
Traders noted that the move showed the central bank's intention to keep liquidity environment stable after the resumption of the initial public offerings (IPO).
Shenwan Hongyuan Securities pointed out that due to seasonal factors, the central bank was expected to adopt open market operations, interest rate cut and required reserve ratio cut to stabilize the liquidity condition in the future.
Given that 20 billion yuan worth of reverse repos were due this week, together with the 10 billion yuan of 7-day reverse repos offered on Tuesday, the central bank injected a net 10 billion yuan into the financial system via this week's open market operation.
Latest comments