BEIJING: China’s central bank drained liquidity from the banking system through open market operations yesterday.
The People’s Bank of China (PBoc) injected 50 billion yuan (about US$7.6bil) into the market through seven-day reverse repos at an interest rate of 2.2%, according to a statement on its website.
With 120 billion yuan of reverse repos maturing on the same day, this led to a net liquidity withdrawal of 70 billion yuan from the market.
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 pursues a prudent monetary policy in a more flexible and appropriate way, according to this year’s government work report. — Xinhua