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China's central bank drains 10b from market

Published: September 27, 2019 14:30:43 | Updated: October 11, 2019 11:01:03


People's Bank of China (PBOC) drained 10 billion yuan (about 1.41 billion US dollars) from the financial system on Friday, with more reverse repos maturing than conducted.

The central bank injected a total of 30 billion yuan into the market through 14-day reverse repos at the interest rate of 2.7 per cent, the central bank said on its website, reports Xinhua.

With 40 billion yuan worth of reverse repos maturing on the same day, this led to a net liquidity withdrawal of 10 billion yuan.

A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

China vowed to keep its prudent monetary policy "neither too tight nor too loose" while maintaining market liquidity at a reasonably ample level in 2019.

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