The People’s Bank of China (PBoC) injected CNY 157.5 billion via seven-day reverse repos on Monday, keeping the borrowing cost unchanged at a record low of 1.4%. This rate remains China’s key policy benchmark and underscores the central bank’s commitment to an accommodative monetary stance to support economic activity.
In a new step, the PBoC also introduced overnight reverse repo operations, supplying CNY 300 billion to financial institutions. The move is aimed at giving policymakers greater flexibility in managing short-term liquidity and smoothing funding conditions in the interbank market. However, the central bank did not disclose the borrowing rate for this new overnight facility.
The rollout of the overnight tool highlights efforts by authorities to fine-tune their liquidity management framework, ensuring ample cash in the banking system while keeping money market rates stable.
