China’s Central Bank Keep Reverse Repo Operations Steady


The Chinese central bank has conducted further reverse repo operations to maintain liquidity on the market as a swathe of contracts mature.

Sources close to China Securities Journal said that on the final day of trading in April the People’s Bank of China undertook 80 billion yuan in reverse repo transactions, comprised of 40 billion yuan in 7 day maturities, 20 billion in 14 day maturities and a further 20 billion yuan in 28 day maturities.

The move comes at 80 billion yuan in contracts mature, and follows 50 billion yuan in reverse repo transactions on 27 April as 90 billion yuan in the contracts matured, for net drainage of 40 billion yuan which brought an end to 7 consecutive trading days of net injections via open market operations.

Industry observers say PBOC’s actions evince its ongoing commitment to maintaining basic liquidity levels in the Chinese system, and expect tightness in short-term capital to improve in May.