(MENAFN) China's central bank has continued to inject funds into the financial system through open market operations. The People's Bank of China announced that it has conducted 2 billion yuan (about 289.19 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.

Open market operations refer to the buying and selling of government securities in order to control the money supply and interest rates. In this case, the People's Bank of China is using reverse repos to inject funds into the financial system. 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.

The purpose of this injection of funds is to maintain liquidity in the banking system and ensure that there is sufficient credit available to support economic growth. The move also helps to stabilize interest rates, which can have a significant impact on borrowing costs for businesses and consumers.

China's economy has been under pressure in recent years due to a slowdown in growth and ongoing trade tensions with the United States. The injection of funds into the financial system is part of a broader effort by the Chinese government to support economic growth and maintain stability in the face of these challenges.

As China continues to navigate a challenging economic environment, policymakers will need to remain vigilant in their efforts to support growth and ensure the stability of the financial system. The use of open market operations, such as reverse repos, will likely continue to play a key role in these efforts, as the central bank seeks to maintain liquidity and support credit availability in the banking system.

MENAFN09052023000045014228ID1106206087