Chinese Central Bank Engages in 2 Billion Yuan of Reverse Repo Operations on 31 August

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The People’s Bank of China (PBOC) engaged in 2 billion yuan of reverse repo operations on Wednesday, 31 August, for the purpose of “maintaining rationally ample liquidity in the banking system”.

The rate for the 7-day reverse repos was 2.0%, the same as for PBOC’s last round of open market operations on 24 August. The move by PBOC coincided with the maturation of 2 billion yuan in reverse repos, for no net change in liquidity.

On Tuesday the overnight Shanghai Inter Bank Offered (SHIBOR) fell 11.1 basis points to 1.124%, while the 7-day Shibor rose 1 basis point to 1.649%.

The weighted average interest rate for the DR007 reverse repo was at 1.6584%, still beneath the Chinese central bank’s policy rate.