China boosts liquidity via reverse repos

BEIJING - China's central bank on Friday pumped 230 billion yuan ($35.38 billion) into the financial system through open market operations.

The operations included 130 billion yuan of seven-day reverse repos, 90 billion yuan of 14-day reverse repos and 10 billion yuan of 63-day reverse repos, the People's Bank of China said on its website.

The interest rates for seven-day, 14-day and 63-day reverse repos were unchanged at 2.5 percent, 2.65 percent and 2.95 percent respectively.

The central bank carried out the operations to offset the impact of a tax payment peak and maturing reverse repos.

Offset by 150 billion yuan of maturing reverse repos, the net injection on Friday stood at 80 billion yuan.

The central bank has increasingly relied on open market operations for liquidity management, rather than cuts in interest rates or reserve requirement ratios.

This year, monetary policy should be kept neutral and the floodgates of money supply should be controlled, according to the Central Economic Work Conference held in December.