China's Central Bank Launches 400 Billion Yuan Reverse Repo Operation
BEIJING, June 13 -- The People's Bank of China (PBOC), the nation's central bank, announced on Friday its plan to execute a 400-billion-yuan operation, equivalent to approximately 55.7 billion U.S. dollars, through outright reverse repos on June 16. This move aims to ensure an adequate level of liquidity within China's banking system.
The forthcoming operation is set to have a six-month tenor and will utilize a fixed-quantity, interest-rate-bidding, and multiple-price-bidding approach, as stated by the PBOC.
Outright reverse repo operations, which the central bank introduced in October 2024 as a measure to manage liquidity in the banking sector, are conducted once each month, typically with tenors not exceeding one year.
This operational strategy represents an important addition to the country's monetary policy arsenal, supplementing existing mechanisms such as temporary repos, temporary reverse repos, and the buying and selling of treasury bonds.
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