CHINA 130 bln yuan of reverse repo contracts to mature in coming week


130 bln yuan of reverse repo contracts to mature in coming week


17:01, August 18, 2018

BEIJING, Aug. 18 (Xinhua) -- A total of 130 billion yuan (about 18.9 billion U.S. dollars) of reverse repos are set to mature in the coming week, data from information service provider Wind showed. 

After 19 consecutive trading days of suspension, the People's Bank of China (PBOC) resumed reverse repo operations on Aug. 16 to offset the impact of tax payments and government bond issuance and keep liquidity at a reasonable and ample level.

The restart of the open market operation showed China's monetary policy is not likely to see further easings in the future, according to an analysis by Huachuang Securities.

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

The country vowed to maintain control over the floodgates of monetary supply and keep liquidity at a reasonable and ample level, according to a statement issued after a meeting of the Political Bureau of the Communist Party of China Central Committee last month.

The PBOC increasingly relies on open-market operations, rather than changes in interest rates or reserve requirement ratios, to manage liquidity in a more flexible and targeted manner.

China will maintain a prudent and neutral monetary policy in 2018 as it strives to balance growth and risk prevention.

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