Cen­tral bank con­tin­ues net cash in­jec­tion

China Daily (Canada) - - BUSINESS19 -

China’s cen­tral bank on Wed­nes­day con­tin­ued to pump money into the in­ter­bank mar­ket via re­verse re­pos to en­sure sta­ble liq­uid­ity. The Peo­ple’s Bank of China con­ducted 160 bil­lion yuan ($24 bil­lion) of sev­en­day re­verse re­pos with an in­ter­est rate of 2.45 per­cent, and 140 bil­lion yuan of 14-day re­verse re­pos with an in­ter­est rate of 2.6 per­cent. Off­set by 30 bil­lion yuan of ma­tur­ing op­er­a­tions, the move re­sulted in a net in­jec­tion of 270 bil­lion yuan. The move is largely in re­sponse to spik­ing liq­uid­ity de­mand in Oc­to­ber due to sea­sonal fac­tors such as tax pay­ments. In Wed­nes­day’s in­ter­bank mar­ket, the overnight Shang­hai In­ter­bank Of­fered Rate, which mea­sures the cost at which banks lend to one an­other, dropped 0.43 ba­sis points to 2.5960 per­cent.

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