China’s c. bank injects 2b yuan to maintain liquidity

China’s central bank, the People’s Bank of China (PBC), injected 2 billion yuan ($281.31 million) into the banking system through seven-day reverse repos, Xinhua reported on Wednesday.

A reverse repo is a financial tool employed by central banks to manage liquidity. In this process, the PBOC purchases securities from commercial banks through bidding, with a pre-determined agreement to resell them back in the future.

By injecting funds through reverse repos, the central bank aims to maintain a healthy level of liquidity within the banking system, allowing banks to lend freely and facilitate economic activity.