PBOC skips open market operations

The People’s Bank of China, the central bank, suspended open market operations for the 11th working day on Monday, citing sufficient liquidity in the banking system. Liquidity was at a “relatively high level,” which can offset the influence from factors such as maturing reverse repos, the PBOC said on its website. A reverse repo is 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 suspension of reverse repos led to a net withdrawal of 40 billion yuan ($6.16 billion) from China’s money market on Monday, as previous reverse repo contracts matured. The PBOC said earlier that it would conduct open market operations in a flexible way to meet the liquidity needs of banks.