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China skips open market operations Tuesday

BEIJING
2018-08-07 14:40

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China's central bank suspended open market operations on Tuesday, citing abundant liquidity in the financial system.

Liquidity in the banking system was at a "relatively high" level, which can offset the impact from factors such as repaying local debt, the People's Bank of China said on its website.

No reverse repos will mature Tuesday.

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.

On Tuesday's interbank market, the overnight Shanghai Interbank Offered Rate, which measures the cost at which banks lend to one another, fell by 20.6 basis points to 1.613 percent.

China will continue to implement a proactive fiscal policy and prudent monetary policy while making policies more forward-looking, flexible, and effective, according to a meeting of the Political Bureau of the Communist Party of China Central Committee on July 31 this year.

The country will maintain control over the floodgates of monetary supply and keep liquidity at a reasonable and ample level, said the meeting.
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