Central bank skips open market operations

The People’s Bank of China, the central bank, skipped open market operations on Thursday for the fourth day after the weeklong Spring Festival holiday. After cash returning to the banking system offset maturing reverse repos, the liquidity level in the banking system remained at a relatively high level, 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. China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day. The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.