China's Central Bank Injects Funds into Financial System through Open Market Operations

(MENAFN) China's central bank has conducted open market operations by injecting funds into the financial system on Tuesday. The People's Bank of China announced on its website that it has conducted 2 billion yuan (291.12 million U.S. dollars) of seven-day reverse repos at an interest rate of 2 percent. This move is aimed at keeping liquidity reasonable and ample in the banking system, according to the central bank.

Reverse repos are a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future. It is a commonly used monetary policy tool aimed at regulating the money supply in the market. By purchasing these securities, the central bank injects funds into the market, which in turn increases the availability of capital for banks and other financial institutions.

The injection of funds through open market operations is a common practice used by central banks around the world to manage the money supply and maintain liquidity in the financial system. This move by the People's Bank of China is in line with its efforts to keep liquidity reasonable and ample in the banking system. It will help to ensure that banks have sufficient funds to meet their short-term obligations and maintain stability in the financial system.

China's central bank has been actively managing its monetary policy to support economic growth and maintain financial stability amid the ongoing COVID-19 pandemic. The injection of funds through open market operations is just one of the many tools the bank has at its disposal to achieve these goals. With the continued support of the central bank, China's financial system is well-positioned to weather the challenges posed by the pandemic and emerge stronger in the years to come.

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