Chinese Central Bank Injects Liquidity Twice This Week

China’s central bank on Thursday pumped more money into the market to ease a liquidity strain.

The People’s Bank of China (PBOC) conducted 130 billion yuan (20 billion U.S. dollars) in seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future.

The reverse repo was priced to yield 2.25 percent, unchanged from Wednesday’s injection of 100 billion yuan, according to a PBOC statement.

The move followed a net injection of 100 billion yuan into the financial system on Tuesday.

On Thursday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, was up by 0.1 basis points to 2.001 percent.

via Xinhua

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza