`China’s central bank will inject a total of 2.1 trillion yuan ($310 billion) into the banking system through overnight reverse repos next week, moving to ease short-term liquidity pressures.
The People’s Bank of China said on Friday it would run the operations from July 29 to 31 and again on August 3. The PBOC will inject 600 billion yuan ($88.58 billion) a day from Wednesday to Friday, followed by a further 300 billion yuan the following Monday.
The central bank debuted the overnight reverse repo tool in June. Markets read the move as tightening the PBOC’s grip on liquidity conditions and bringing its policy framework closer to that of global peers.
($1 = 6.7735 Chinese yuan)
The Herald View: The tool is only weeks old and Beijing is already running it at scale. That signals a central bank building the machinery for far more active, day-to-day liquidity management than it has used before.