China central bank cuts 14-day reverse repo rate, steps up cash injections

SHANGHAI (Reuters) – China’s central financial institution lowered the borrowing price of 14-day reverse repos on Monday and stepped up money injections to counteract greater demand in direction of the quarter-end.

The Individuals’s Financial institution of China (PBOC) injected 2 billion yuan ($286.54 million) by 7-day reverse repos and one other 10 billion yuan by the 14-day tenor, it mentioned in an announcement.

The PBOC mentioned the upper every day money injection, up from the every day 2 billion yuan choices since July, was to “keep liquidity degree steady at finish of the quarter”, in keeping with the assertion.

The PBOC additionally resumed 14-day operations for the primary time since late January, whereas reducing the rate of interest on liquidity instrument by 10 foundation factors to 2.15% from 2.25%.

The discount was a catch-up transfer to the central financial institution’s choice in August by reducing some key rates of interest, together with the 7-day reverse repo price, to revive credit score demand and prop up the sputtering financial system.

With no reverse repo maturing on Monday, the PBOC injected a internet 12 billion yuan through the short-term liquidity devices.

($1 = 6.9799 Chinese language yuan)

(Reporting by Winni Zhou and Brenda Goh; Modifying by Kim Coghill)