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China's central bank injects liquidity via reverse repos

BEIJING
2018-05-28 15:57

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China's central bank on Monday injected funds into the banking system via open market operations to maintain liquidity.

The People's Bank of China (PBOC) conducted 20 billion yuan (about 3.13 billion U.S. dollars) of seven-day reverse repos and 10 billion yuan of 28-day reverse repos, according to a PBOC statement.

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

The interest rate for the seven-day reverse repos stood at 2.55 percent, while the rate for 28-day contracts was 2.85 percent.

The PBOC has recently managed market liquidity through targeted moves rather than across-the-board adjustments of interest rates.

The central bank plans to keep monetary policy prudent and neutral, maintain a stable, reasonable level of liquidity, and oversee moderate growth of financial credit and social financing.
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