China’s Central Bank implements reverse repo to add liquidity

China’s Central Bank conducted a 7-day reverse repurchase agreement amounting to 10 billion yuan (approximately $1.41 billion) at an interest rate of 1.8 per cent, Xinhua reported on Monday.

The People’s Bank of China (PBOC) emphasised that this measure aims to maintain a reasonable and ample level of liquidity within the banking system.

In a reverse repo, the central bank purchases securities from commercial banks through a bidding process, with an agreement to repurchase them in the future.