China’s PBC injects 157.7b yuan via reverse repo operation

The People’s Bank of China (PBC) conducted a seven-day reverse repo operation worth 157.7 billion yuan on Tuesday at an interest rate of 1.50 per cent.

This liquidity injection is part of the central bank’s efforts to “keep liquidity adequate at a reasonable level in the banking system” as the year 2024 nears its end.

Reverse repo operations are a monetary policy tool used by central banks to manage short-term liquidity. Under this mechanism, the PBC purchases securities from commercial banks through a bidding process, with an agreement to sell them back at a later date.

The move underscores the PBC’s commitment to ensuring financial stability and supporting the smooth functioning of the banking sector.

Attribution: Amwal Al Ghad English