People's Bank of China injects liquidity with USD30.31B of reverse repo

7/31/2024 8:03:40 AM

(MENAFN) On Tuesday, the People's bank of China (PBOC) executed reverse repurchase operations totaling 216.27 billion yuan, approximately 30.31 billion U.S. dollars, at an interest rate of 1.7 percent. This move is part of the central bank's strategy to ensure that the banking system maintains adequate and abundant liquidity through the end of the current month. The PBOC's action highlights its ongoing efforts to stabilize and support the financial environment amid varying economic conditions.

Reverse repos, a key monetary policy tool, involve the central bank purchasing securities from commercial banks with an agreement to sell them back at a later date. This mechanism helps manage short-term liquidity and influence market interest rates. By conducting these operations, the PBOC aims to provide banks with additional funds while controlling the cost of borrowing and ensuring liquidity levels remain appropriate for economic stability.

The report emphasizes that the PBOC's intervention through reverse repos is designed to address potential liquidity pressures and sustain market conditions conducive to economic growth. This measure reflects the central bank's proactive approach to maintaining financial stability and supporting economic activity in a period marked by significant economic adjustments and uncertainties.

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