China’s central bank on Wednesday will inject 70 billion yuan ($10.48 billion) into money markets through seven-day reverse bond repurchase agreements, 30 billion yuan through 14-day reverse repos and an additional 65 billion yuan through 28-day reverse repos, traders said.
The People’s Bank of China (PBOC) on Tuesday utilised the 28-day facility to inject cash for the first time since February. The central bank also cut the guidance rate for such a tenor to 2.55 percent from 2.60 percent.
Traders said the longer-tenor was used to avoid any holiday cash crunch ahead of the National Day holiday.
The central bank’s last use of the 28-day reverse repos in February also came ahead of the Chinese New Year holiday.
The PBOC drained a net 150 billion yuan from the banking system last week.
In early trade on Wednesday, the volume weighted average of the seven day repo rate was at 2.25 percent, down 14.2 basis points from the previous closing average rate.