China’s c. bank offers 234.6b yuan via open market operations

The People’s Bank of China (PBC) conducted open market operations totalling 234.6 billion yuan on Monday to ensure adequate liquidity in the banking system.

The auction shall be in two tranches: a seven-day 160.1 billion-yuan reverse repo at an interest rate of 1.7 per cent, and a 14-day 74.5 billion-yuan reverse repo at an interest rate of 1.85 per cent.

Notably, the PBC offered 568.2 billion yuan on Wednesday, September 18th, through seven-day reverse repurchase agreements, maintaining the same interest rate.

A reverse repo is a tool used by central banks to manage liquidity. The PBC purchases securities from commercial banks through a bidding process, with an agreement to resell them back in the future.

Attribution: PBC’s website

Subediting: M. S. Salama