BEIJING — China’s central bank continued to inject funds into the money market on Dec 18 to maintain liquidity.
The People’s Bank of China (PBOC) conducted 140 billion yuan (about $20.3 billion) of seven-day reverse repos at an interest rate of 2.55 percent, and 40 billion yuan of 14-day reverse repos at a rate of 2.7 percent.
The move was aimed at offsetting the impact of such factors as tax payments and keeping liquidity in the banking system at a reasonable and sufficient level, a PBOC statement said.
The central bank resumed open market operations on Dec 17 after a suspension that lasted for a record 36 straight trading days. Analysts expect liquidity to be kept at a moderately easy level in the coming weeks to cope with downward economic pressures and year-end liquidity strain.
Through reverse repos, the central bank adds liquidity to the banking system by purchasing securities from commercial banks through bidding, with an agreement to sell them back in the future.