Xinhua Silk Road - Belt and Road Portal, China's silk road economic belt and 21st Century Maritime Silk Road Website Xinhua Silk Road - Belt and Road Portal, China's silk road economic belt and 21st Century Maritime Silk Road Website
Subscribe CustomBlackClose

Belt & Road Weekly Subscription Form

download_pop

Research ReportCustomBlackClose

The full edition of the report is available at Xinhua Silk Road Database. You can click the “Table of Content” to have a general understanding of it.

Click on the button below to create your account and get immediate access to thousands of articles.

Start a Free Trial

Xinhua Silk Road Database
Economy

【Financial Str. Release】China cuts reverse repo rate by 10 basis points to maintain liquidity

January 25, 2022


Abstract : China's central bank on Monday lowered the rate of its 14-day reverse repos by 10 basis points for the first time since June 2020, to maintain stable liquidity in the banking system ahead of the Spring Festival.

File photo taken shows the headquarters of the People's Bank of China in Beijing, capital of China. (Xinhua/Cai Yang)

BEIJING, Jan. 24 (Xinhua) -- China's central bank on Monday lowered the rate of its 14-day reverse repos by 10 basis points for the first time since June 2020, to maintain stable liquidity in the banking system ahead of the Spring Festival.

The People's Bank of China (PBOC) injected 150 billion yuan (23.7 billion U.S. dollars) worth of reverse repos into the market at an interest rate of 2.25 percent, compared with 2.35 percent in previous operations.

In line with market expectations, the move came amid the country's continuous efforts recently to lower companies' lending costs and further boost economic growth.

Last week, the PBOC cut the interest rates of its medium-term lending facility (MLF) loans and seven-day reverse repos by 10 basis points.

The country also lowered the one-year loan prime rate (LPR) by 10 basis points and the over-five-year LPR, on which many lenders base their mortgage rates, by 5 basis points on Jan. 20 to enhance monetary policy support for the economy.

Analysts said the rate adjustment for 14-day reverse repos "follows the steps" of MLF and seven-day reverse repos as the reduction volumes are the same. The central bank resumed the 14-day reverse repo operation after an interval of one month, helping to stabilize liquidity and reduce fund fluctuations in the market during the holiday.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

Scan the QR code and push it to your mobile phone

Keyword: liquidity Financial Str. Release

Write to Us belt & road login close

Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to [email protected] and share your stories with more people.

Click on the button below to create your account and get im http://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

Start a Free Trial

Ask Us A Question belt & road login close

If you have any questions, please enter them in the box below.

Identifying code Reload

Write to Us belt & road login close

Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to silkroadweekly@xinhua.org and share your stories with more people.

Click on the button below to create your account and get im http://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

Start a Free Trial