Seeing the depletion of market in the recent days, Central Bank of China has decided to inject money in the market. China’s central bank elevated 50 billion yuan ($7.85 billion) into the money market via reverse repurchase agreement (repo) on Tuesday, the first cash injection by the China this week.
The yield for the seven-day reverse repo attain at 2.35 percent according to a statement of the People’s Bank of China (PBOC)., Xinhua news agency quoted the Bank of China’s (PBOC) statement as saying.
Under a reverse repo, the central bank purchases securities from large banks and brokerages with the agreement to sell them in the future as an effective means to tackle short-term money shortages in the market.
The cash injection will offset the effects from earlier reverse repo due on Tuesday.
Given a stable renminbi (RMB), the money shortage was greatly eased in September and the PBOC’s operations were smaller than those in August.