Central bank drains 100 bln yuan from market

Beijing, Sep 26 (Xinhua/APP):China’s central bank drained 100 billion yuan (about 14.1 billion U.S. dollars) from the financial system on Thursday, with more reverse repos maturing than conducted.

The People’s Bank of China (PBOC) injected a total of 20 billion yuan into the market through 14-day reverse repos at the interest rate of 2.7 percent, the central bank said on its website.

With 120 billion yuan worth of reverse repos maturing on the same day, this led to a net liquidity withdrawal of 100 billion yuan.

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.

China vowed to keep its prudent monetary policy “neither too tight nor too loose” while maintaining market liquidity at a reasonably ample level in 2019.

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