The central bank of China keeps increasing liquidity through reverse repos

The central bank of China keeps increasing liquidity through reverse repos

On Wednesday, China’s central bank kept adding money to the financial system through open market transactions.

On its website, the People’s Bank of China said that it has completed 4 billion yuan (or 575.33 million dollars) in seven-day reverse repos with a 2% interest rate.

According to the central bank, the action is intended to maintain a reasonable and ample level of liquidity in the financial system.

In a reverse repo, the central bank makes a bid to buy assets from commercial banks with the understanding that it will later sell the securities back. the Xinhua

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