Tuesday, 18 January 2022

China’s central bank injects liquidity into market

Bloomberg Photo

BEIJING: China’s central bank pumped 40 billion yuan (about 5.6 billion US dollars) into the financial system Tuesday. The People’s Bank of China injected the liquidity through 14-day reverse repos at an interest rate of 2.7 percent.

With no reverse repos maturing Tuesday, this led to a net injection of 40 billion yuan. 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 will keep its prudent monetary policy “neither too tight nor too loose” while maintaining market liquidity at a reasonably ample level in 2019.

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