BEIJING, May 11 -- The mutually reinforcing relationship between financial regulation and monetary cocktail will keep China's liquidity basically stable in months ahead, according to analysts.
After a three-day suspension of reverse repos, the central bank renewed cash injections Wednesday as liquidity pressure increased as 190 billion yuan (about 27.5 billion U.S. dollars) of previous reverse repos matured.
The People's Bank of China (PBOC) conducted 110 billion yuan of reverse repos and pumped 47.6 billion yuan into the market through pledged supplementary lending (PSL), a tool designed which helps the central bank target longer-term rates.
Purchases of short-dated maturities have remained the central bank's main method of stabilizing liquidity, and Wednesday's operations included 90 billion yuan of seven-day reverse repos priced to yield 2.45 percent; 10 billion yuan of 14-day contracts with a yield of 2.6 percent; and 10 billion yuan of 28-day agreements with a yield of 2.75 percent.
Despite the injections, the money market witnessed a net cash withdrawal Wednesday, showing the central bank's intention of tightening things up, at least in the short term.
"The withdrawal can be explained by the recent calmness of inter-bank and exchanging markets," said Chen Yi, researcher with Bank of Communications.
On Thursday, the central bank injected 20 billion yuan of new money, with 80 billion yuan of reverse repos offset by the maturation of another 60 billion yuan.
【国内英语资讯:Economic Watch: Regulation, monetary cocktail to keep liquidity stable】相关文章:
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