China’s central bank injects liquidity into market

China’s Central Bank continued to pump cash into the banking system via reverse repos to maintain liquidity and assetibility.
110 billion yuan (about 16.25 billion U.S. dollars) was injected by the People’s Baknk of China into the market at an interest rate of 2.2 per cent through seven-day reverse repos according to a statement on the website of the central bank.
The move was intended to maintain reasonable and ample liquidity in the banking system says The central Bank.
As 140 billion yuan of reverse repos and 200 billion yuan of Medium-term Lending Facility (MLF) matured Thursday, the operation led to a net withdrawal of 230 billion yuan from the market.
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.
According to this year’s government work report, China pursues a prudent monetary policy in a more flexible and appropriate way.