BEIJING: he People’s Bank of China, China’s central bank, has injected 50 billion yuan ($8.2 billion) into the money market through open market operations, it announced here the other day.
This has marked the fourth consecutive cash injection through the central bank’s regular reverse repurchase agreement (repo) on Tuesdays and Thursdays since June 25.
The yield for the latest seven-day reverse repo stood at 2.5 percent, according to the central bank.
The latest cash injection will offset another 50 billion yuan of reverse repo agreements due on Tuesday, meaning net cash injection on Tuesday is zero. Meanwhile, another 35 billion yuan of reverse repo agreements are due to Thursday.
Since June, the central bank has resorted to reverse repo operations and medium-term lending facilities (MLF) to inject liquidity to the market. The PBOC extended a six-month MLF worth 250 billion yuan at an interest rate of 3.35 percent to 11 banks last Friday. It also lowered interest rates and the reserve requirement ratio on June 28.
These moves aim to boost liquidity and lower financing costs in the real economy, said Zeng Gang, a banking researcher at the Chinese Academy of Social Sciences.
