China’s central bank continues to inject liquidity into market

China’s central bank continued to inject liquidity into the financial system through open market yesterday, reports Xinhua from Beijing.

The People’s Bank of China pumped 80 billion yuan (about 11.9 billion U.S.  dollars) into the market through reverse repos after injecting a total of 390 billion yuan with similar operations on Tuesday and Monday.

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

The central bank conducted 60 billion yuan of seven-day reverse repos at an interest rate of 2.55 percent and 20 billion yuan of 14-day reverse repos at 2.7 percent.

The central bank increasingly relies on open-market operations, rather than changes in interest rates or reserve requirement ratios, to manage liquidity in a more flexible and targeted manner.

 

Chinas central bank continues to inject liquidity into market

Chinas central bank continued to inject liquidity into the financial system through open market yesterday, reports Xinhua from Beijing. The Peoples Bank of China pumped 80 billion yuan (about 11.9 billion U.S. dollars) into the market through reverse repos after injecting a total of 390 billion yuan with similar operations on Tuesday and Monday. A reverse repo is a process by which the central bank bids and buys securities from commercial banks, with an agreement to sell them back in the future. The central bank conducted 60 billion yuan of seven-day reverse repos at an interest rate of 2.55 percent and 20 billion yuan of 14-day reverse repos at 2.7 percent. The central bank increasingly relies on open-market operations, rather than changes in interest rates or reserve requirement ratios, to manage liquidity in a more flexible and targeted manner.