China’s c. bank injects $281.5m to boost liquidity

By Nada Ali On May 13, 2024

Chinese 100 yuan banknotes are seen in a counting machine while a clerk counts them at a branch of a commercial bank in Beijing, China. Photo Credit: REUTERS

China’s central bank, the People’s Bank of China (PBOC), injected two billion yuan ($281.57 million) into the banking system on Monday through a seven-day reverse repo operation, Xinhua reported.

The PBOC utilises reverse repos to manage liquidity in the financial system. In this operation, the central bank essentially buys securities from commercial banks with an agreement to resell them at a later date.

This injects cash into the banking system, making it easier for banks to lend money.

The reverse repo was conducted at an interest rate of 1.8 per cent, which has remained unchanged for the past few months.