Beijing: The People’s Bank of China (PBOC), the country’s central bank, has announced a reduction in the rate for the seven-day reverse repos by 0.1 percentage points as part of its efforts to inject liquidity into the banking system.
According to Qatar News Agency, the PBOC conducted 158.6 billion yuan (approximately $22 billion) of seven-day reverse repos at an interest rate of 1.4%. This rate marks a decrease from the previous rate of 1.5% that was recorded just a day earlier.
A reverse repo is a financial instrument used by the central bank, where it purchases securities from commercial banks through a bidding process, with a subsequent agreement to sell them back in the future. This mechanism is typically utilized to manage liquidity and control monetary conditions within the banking sector.