(ATF) China’s central bank on Thursday pump more cash into the financial system via reverse repos.
The People’s Bank of China (PBoC) injected 240 billion yuan ($33.7bn) into the system through seven-day instruments at an interest rate of 2.2%, according to a statement on the website of the central bank.
The move aims to offset the impact of factors including government bond issuance and final settlement of corporate income tax, and keep liquidity in the banking system at a reasonably sufficient level, the statement said.
As no reverse repos matured Thursday, this led to the net injection.
A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
The PBoC pledged in its first-quarter monetary policy report that it will step up counter-cyclical adjustments to support the real economy, make monetary policy more flexible and appropriate, and continue to deepen reforms of the market-oriented interest rate and the yuan exchange rate.
