China's central bank injects 180 billion Yuan into market

By Masood Sattar Khan
(Pakistan News & Features Services)

China's central bank on June 19 pumped cash into the banking system via reverse repos to maintain liquidity. 

The People's Bank of China injected a total of 180 billion Yuan (about 25.4 billion US dollars) into the market, including 70 billion Yuan through seven-day reverse repos at an interest rate of 2.2 percent and 110 billion Yuan of 14-day contract at an interest rate of 2.35 percent, according to a statement on the website of the central bank. 

The move was intended to maintain stable liquidity in the banking system, the central bank said. 

As 100 billion Yuan of reverse repos and 240 billion Yuan of medium-term lending facility (MLF) matured on June 19, the operation led to a net withdrawal of 160 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.