BUSINESS China's central bank skips reverse repos for 2nd day

BUSINESS

China's central bank skips reverse repos for 2nd day

Xinhua

10:26, August 30, 2019

BEIJING, Aug. 30 (Xinhua) -- China's central bank skipped reverse repos for a second day consecutively on Friday, citing abundant liquidity on the market.

Increased fiscal spending near the end of the month has offset the issuance of government bonds and the maturing of previously conducted reverse repos, resulting in reasonably ample liquidity in the banking system, the People's Bank of China said in a statement.

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.

With 80 billion yuan (about 11 billion U.S. dollars) of reverse repos maturing Friday, the central bank effectively withdrew the same amount of money from the market.

China will 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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