ZCZC
BCN-10
CHINA-CENTRAL-BANK
China central bank continues to skip open market operations
BEIJING, Jan 9, 2018 (BSS/XINHUA) – China’s central bank suspended open
market operations for the 12th working day Tuesday, citing sufficient
liquidity in the banking system.
Liquidity was at a “moderate level,” which can offset the influence from
factors such as maturing reverse repos, the People’s Bank of China (PBOC)
said on its website.
A reverse repo is a process by which the central bank purchases securities
from commercial banks through bidding, with an agreement to sell them back in
the future.
The suspension of reverse repos led to a net withdrawal of 130 billion yuan
(about 20 billion U.S. dollars) from China’s money market Tuesday, as
previous reverse repo contracts matured.
The PBOC said earlier that it would conduct open market operations in a
flexible way to meet the liquidity needs of banks.
China will continue a prudent and neutral monetary policy in 2018 as the
world’s second-largest economy strives to balance growth with risk
prevention.
“Prudent monetary policy should be kept neutral, the floodgates of monetary
supply should be controlled, and credit and social financing should see
reasonable growth,” said a statement released after the Central Economic Work
Conference.
BSS/XINHUA/MR/1240hrs