PBOC Siphons Off Liquidity for Fourth Straight Day
Tang Shihua
DATE:  Aug 06 2020
/ SOURCE:  Yicai
PBOC Siphons Off Liquidity for Fourth Straight Day PBOC Siphons Off Liquidity for Fourth Straight Day

(Yicai Global) Aug. 6 -- The People's Bank of China continued to drain funds from its monetary system today, reiterating that the financial system's liquidity is still "reasonably ample."

The bank withdrew another CNY50 billion from the financial system this morning by refraining from an open market operation for the fourth consecutive day to counter the expiration of reverse repos.

The bank has yanked a total of CNY260 billion of liquidity out of the system by foregoing open market operations thus far this week.

Reverse repo agreements are primary tools financial institutions and banks use to provide temporary lending facilities to fund ongoing operations, where a buyer undertakes to temporarily buy a basket of securities for a fixed period and to sell them back at a slightly higher price.

Editor: Ben Armour

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Keywords:   Open Market Opertion,Reverse Repo,PBOC,Monetary Policy