Cen­tral bank in­jects fresh funds to mar­ket

China Daily (USA) - - BUSINESS -

China’s cen­tral bank on Thurs­day in­jected fresh funds to the money mar­ket via re­verse re­pos to keep liq­uid­ity sta­ble. The Peo­ple’s Bank of China pumped 100 bil­lion yuan ($15.3 bil­lion) into the fi­nan­cial sys­tem via a process by which the cen­tral bank pur­chases se­cu­ri­ties from com­mer­cial banks through bid­ding with an agree­ment to sell them back in the fu­ture. The op­er­a­tions in­cluded 60 bil­lion yuan seven-day re­verse re­pos priced to yield 2.45 per­cent, 30 bil­lion yuan of 14-day con­tracts with a yield of 2.6 per­cent and 10 bil­lion yuan of 28-day agree­ments with a yield of 2.75 per­cent. The cen­tral bank has in­creas­ingly re­lied on open mar­ket op­er­a­tions for liq­uid­ity man­age­ment, rather than cuts in in­ter­est rates or re­serve re­quire­ment ra­tios. China set the tone of its mon­e­tary pol­icy in 2017 as pru­dent and neu­tral, keep­ing ap­pro­pri­ate liq­uid­ity lev­els but avoid­ing ex­ces­sive liq­uid­ity in­jec­tions.

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