People’s Bank of China injects RMB173 billion of liquidity via open market operation1 November, 2012, 11:14. Posted by Zarathustra
People’s Bank of China performs yet another round of reverse repurchase operation to inject massive amount of liquidity into the banking system.
Today’s operation includes RMB58 billion of 7-day reverse repo at 3.35% and RMB115 billion of 14-day reverse repo at 3.45%. The rates remain unchanged for today’s operation. Today’s operation offer a total of RMB173 billion of liquidity.
For the full week, PBOC has made a net injection of RMB379 billion, a new record high net injection for the single week, suggesting that liquidity condition remains tight and unstable in China.
Note that while PBOC is reluctant to use reserve requirement ratio as a tool to manage liquidity in the banking system, the total net injection since June amounted to more than RMB1.3 trillion, and that is roughly equivalent to three 50bps cuts of reserve requirement ratio.