BEIJING — China’s central bank on July 28 continued to pump money into the interbank market via reverse repos to ensure stable liquidity.
The People’s Bank of China (PBOC) conducted 100 billion yuan (nearly $15 billion) of seven-day reverse repos with an interest rate of 2.45 percent, and 40 billion yuan of 14-day reverse repos with an interest rate of 2.6 percent.
Offset by 100 billion yuan of maturing operations, the move resulted in a net injection of 40 billion yuan.
In interbank market on July 28, the overnight Shanghai Interbank Offered Rate, which measures the cost at which banks lend to one another, rose 2.92 basis points to 2.8152 percent.
There was a total of 280 billion yuan of net cash injections for financial institutions from July 24 to July 28, down from 510 billion yuan a week ago.
The PBOC has increasingly relied on open-market operations for liquidity, rather than cuts in interest rates or reserve requirement ratios, to maintain a stable money market.
China set the tone of its monetary policy in 2017 as prudent and neutral, keeping an appropriate liquidity level but avoiding excessive injections.