BEIJING — China’s central bank conducted a total of 60 billion yuan (about $8.71 billion) of reverse repos on Dec 19 to maintain liquidity.
The People’s Bank of China (PBOC) injected 40 billion yuan of 7-day reverse repos and 20 billion yuan of 14-day reverse repos at an interest rate of 2.55 percent and 2.7 percent respectively.
The PBOC has pumped funds into the market for three consecutive days so far this week, with the total injection worth 400 billion yuan.
A PBOC statement said the move was aimed at keeping liquidity in the banking system at a reasonable and sufficient level. The central bank resumed open market operations on Dec 17 after a suspension that lasted for a record 36 straight trading days.
Through reverse repos, the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.