Economy Jun 04

PBoC injects 70bn yuan into money markets

Reverse repurchase agreements help to restock bank coffers after bout of government bond sales 

by Nadeem Xu
PBoC injects 70bn yuan into money markets

(ATF) The People's Bank of China injected 70 billion yuan ($9.9bn) into money markets through seven-day reverse repurchase agreements on Thursday. 

So-called reverse repos involve the central bank buying assets from banks in order to provide them funds for lending projects. 

The latest round of securities, sold with an interest rate of 2.2%, was aimed at replenishing bank coffers depleted by recent government bond sales, according to a statement on the central bank’s website.

It also helped fund the maturity of 240bn yuan of reverse repos that were due Thursday, resulting in a net withdrawal of 170 billion yuan from the market.

China's central bank pledged in its first-quarter monetary policy report that it will step up counter-cyclical adjustments to support the real economy, to loosen its monetary rules and deepen market reforms.

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