China’s c. bank pumps 2b yuan to maintain banking sector

China’s central bank, the People’s Bank of China (PBC), injected a 2 billion-yuan ($281.5 million) liquidity into the banking system on Monday through seven-day repurchase agreements (repos), Xinhua reported.

This financial tool involves the central bank purchasing securities from commercial banks with an agreement to resell them at a predetermined date.

By injecting funds through repos, the PBOC aims to maintain a reasonable and sufficient level of liquidity within the banking system.

Adequate liquidity in the banking system allows banks to lend more freely to businesses and consumers, which can stimulate economic activity.