PBOC Sluices CNY50 Billion Liquidity Into Financial System
Tang Shihua
DATE:  Oct 19 2020
/ SOURCE:  Yicai
PBOC Sluices CNY50 Billion Liquidity Into Financial System PBOC Sluices CNY50 Billion Liquidity Into Financial System

(Yicai Global) Oct. 19 -- The People's Bank of China injected another CNY50 billion cash into the financial system by conducting an open market operation today.

The purpose of the operation is to keep the liquidity of its financial system "reasonably ample," the regulator reiterated in a statement today.

The bank carried out CNY50 billion in seven-day reverse repos today without maturing of the previous operation, effectively adding such amount of fresh funds into the system.

The bank resumed open market operation since Oct. 14 after a long holiday hiatus at the start of this month.

A reverse repo is a process in which the central bank purchases securities from commercial banks via bidding, with an agreement to sell them back in the future. In this way, commercial banks can raise short-term capital. It is the equivalent of a short-term loan with these instruments.

Editor: Ben Armour

 

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Keywords:   Reverse Repo,Open Market Operation,Monetary Policy,Market Liquidity,PBOC