The People's Bank of China (PBOC), China's central bank, conducted 10 billion yuan worth of 7-day reverse repurchase agreements (repo) in Tuesday's open market operations (OMO), with the scale down sharply from the 40 billion yuan offered last Thursday. Insiders noted that despite investors' prudent attitude at the year end, capital outflow under the U.S. Federal Reserve's interest rate hike and intensive IPOs last week, the liquidity condition was still better than expected. Hence, it was well within expectations that the central banks slashed its reverse repo offering scale.
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