China’s PBC pumps 4.1b yuan into financial system via reverse repo

The People’s Bank of China (PBC) conducted on Thursday a seven-day reverse repurchase agreement (reverse repo), injecting 4.1 billion yuan into the banking system at an interest rate of 1.50 per cent.

This action is part of the central bank’s ongoing efforts to ensure sufficient liquidity in the financial system, reinforcing its commitment to maintaining stability in the markets.

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

Attribution: Amwal Al Ghad English