China’s Central Bank Rolls Over 1.1 Trillion Yuan Reverse Repo

(MENAFN) The People’s Bank of China (PBOC), the nation’s monetary authority, declared on Wednesday that it will implement a 1.1-trillion-yuan (around 157 billion U.S. dollars) outright reverse repo transaction on Thursday to ensure sufficient cash flow within the banking sector.

This measure will be executed in a fixed volume through interest-rate tenders, with successful bids chosen at multiple pricing levels and a maturity span of three months.

Since 1.1 trillion yuan worth of three-month outright reverse repos are scheduled to expire in January, the latest step essentially represents a renewal of the same sum.

Wang Qing, chief macro strategist at Golden Credit Rating, suggested that the action signals the persistence of accommodative monetary policy. He explained that it supports government bond issuance at the start of the year and enables financial institutions to sustain the strength of monetary and credit distribution.

Outright reverse repo transactions — a mechanism the central bank introduced in October 2024 to regulate liquidity in the domestic banking system — are conducted monthly with a duration not exceeding one year.

These operations have broadened the nation’s monetary policy instruments, supplementing earlier approaches such as temporary repos, short-term reverse repos, and the trading of treasury bonds.

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