China’s central bank conducts $66 billion via reverse repos Monday

BEIJING: China's central bank conducted 471 billion yuan (about US$66 billion) of seven-day reverse repos at an interest rate of 1.7 percent Monday. Xinhua news agency quoted the People's Bank of China as saying that the move aims to keep liquidity reasonable and ample in the banking system at the end of the month. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future. The central bank on Monday also pumped 300 billion yuan into the market via the medium-term lending facility (MLF), which will mature in one year at an interest rate of 2.3 percent. This MLF tool is designed to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral. Source: Emirates News Agency