China’s PBC injects 1.1b yuan into banking system via reverse repo

People’s Bank of China (PBC) conducted on Wednesday a seven-day reverse repurchase agreement (reverse repo), injecting 1.1 billion yuan into the financial system at an interest rate of 1.50 per cent.

This move is part of the central bank’s ongoing efforts to ensure adequate liquidity within the banking sector, reinforcing its commitment to maintaining financial market stability.

A reverse repo is a key tool used by central banks to manage liquidity. In this process, the PBC purchases securities from commercial banks through a bidding mechanism, with the agreement to sell them back at a later date. This operation helps regulate the money supply and supports economic stability.

Attribution: Amwal Al Ghad English