The People's Bank of China, China's central bank, suspended reverse repo sales in its routine open market operations on Thursday.
As 70 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 drew a net 60 billion yuan out of the financial system via this week's open market operations.
Traders noted that thanks to massive fiscal deposit release at the year-end, the liquidity condition in the money market still remained ample.
Shenwan Hongyuan Securities pointed out that the possibility of future required reserve ratio (RRR) cut still exists.
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