PBOC Holds Off on Open Market Operations for 12th Consecutive Trading Day


The Chinese central bank has extended the stretch of its absence from open market operations to 12 successive trading days, withdrawing a total of 1.05 trillion yuan from the system.

On Tuesday 9 January the People’s Bank of China announced that total liquidity in the Chinese banking system would still be at adequate levels following the maturation of its repo agreements, and that it would refrain from open market operations.

On the same date the money market saw a net withdrawal of 130 billion yuan in liquidity, for the 12th consecutive trading day that PBOC has skipped open market operations, as well as a net withdrawal of 1.05 trillion yuan across the period.

PBOC has flagged “prudent and neutral” monetary policy for 2018, and will pursue the goal of “levelling the peaks and filling the troughs” when it comes to open market operations.

The Shanghai Interbank Offered Rates continue to remain weak, with the overnight rate falling 2.3 basis points on 8 January to 2.4610%, and the one-month rate plunging 8.7 basis points to 4.2886%.