China’s c. bank injects 78.6b yuan reverse repo

The People’s Bank of China (PBC) conducted a seven-day reverse repo operation on Wednesday, injecting 78.6 billion yuan into the banking system at an interest rate of 1.50 per cent.

This move aims to ensure an “adequate” and “reasonable” level of liquidity within the financial system, according to a statement on the PBC’s website.

Reverse repos are a key monetary policy tool used by central banks to manage liquidity. Under this mechanism, the PBC purchases securities from commercial banks through a bidding process, with a commitment to sell them back at a later date.

Attribution: PBC’s website

Subediting: M. S. Salama