China’s central bank injects liquidity into market

BEIJING (XINHUA) – China’s central bank yesterday pumped cash into the banking system via reverse repos to maintain liquidity.

The People’s Bank of China injected CNY100 billion (about USD14.4 billion) into the market through seven-day reverse repos at an interest rate of 2.2 per cent, according to a statement on the website of the central bank.

The move was intended to maintain reasonable and ample liquidity in the banking system, the central bank said. A total of CNY50 billion of reverse repos matured yesterday.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

China pursues a prudent monetary policy in a more flexible and appropriate way, according to this year’s government work report.