China Central Bank Resumes Reverse Repo Sales After Six-Day Halt
- PBOC revives cash-adding tool as $153 billion set to come due
- Any withdrawals will be gradual to avoid crunch, analyst says
PBOC Resumes Selling Reverse-Repurchase Agreements
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China’s central bank restarted the use of an instrument that adds cash to the financial system, helping ease liquidity concerns before $153 billion of funds come due this week.
The monetary authority sold a total 100 billion yuan ($14.5 billion) of reverse-repurchase agreements, the first auction after a six-day pause, a statement posted on its website showed. While the open-market operations resulted in a net withdrawal of 90 billion yuan because of maturing contracts, the resumption signals that policy makers don’t want a sudden tightening of money supply, according to Bank of Tokyo-Mitsubishi UFJ (China) Ltd.