China central bank injects liquidity into market via reverse repos, PSL

BY  | FROM  | 2017-05-10 15:04

The central bank injected cash into the money market through a variety of tools Wednesday to ease liquidity.
The People's Bank of China (PBOC) conducted 110 billion yuan (about 15.93 billion U.S. dollars) of reverse repos, a process by which central banks purchase securities from banks with an agreement to sell them back in the future.
The operations included 90 billion yuan of seven-day reverse repo priced to yield 2.45 percent; 10 billion yuan of 14-day contracts with a yield of 2.6 percent; and 10 billion yuan of 28-day agreements with a yield of 2.75 percent.
It was the first cash injection by the PBOC via reverse repos after a three-business day suspension.
As 190 billion yuan of previous reverse repos were due Wednesday, the operation still resulted in a net liquidity withdraw of 80 billion yuan from the market.
On Wednesday, the PBOC also pumped 47.6 billion yuan into the market through pledged supplementary lending (PSL), a tool designed to help the central bank better target longer-term lending rates.
The central bank has increasingly relied on open-market operations for liquidity, rather than cuts to interest rates or reserve requirement ratios to maintain its prudent monetary policy.

    Related News

      Financial Times

    • Fed fears market misreading of guidance
    • The US Federal Reserve is keen to revamp its forward guidance about future interest rates but terrified of a market misunderstanding, according to the minutes of its September meeting


    • Asian shares rebound after Fed renews dovish credentials
    • Asian shares bounced back and the dollar fell on Thursday after minutes of the U.S. Federal Reserve's latest policy meeting showed policymakers have some concerns about downside risks to the global economy and the dol...


    • Nigeria succeeds at containing Ebola
    • People here are shaking hands again, kissing, hugging, touching. These days, shops are open, people are working, and children are finally going back to 
    Chinese Dictionary: