BEIJING, Oct. 30 (Xinhua) -- The People's Bank of China (PBOC), the Chinese central bank, decided to adopt outright reverse repurchase (repo) operations in its open market operations (OMOs) from October 28, reported Xinhua Finance recently.
PBOC took the move to enrich its monetary policy toolkit and maintain a reasonably fluid banking system in China.
With open market primary dealers as the counterparties, the Chinese central bank announced to conduct in principle outright reverse repos with a tenor of no more than one year once a month.
Underlying assets for the outright reverse repos are allowed to include T-bonds, local government bonds, financial bonds, corporate debentures, etc.
Outright reverse repos here refer to a type of reverse repos which involves transfer of underlying assets ownership when the central bank purchases securities from its counterparties, usually commercial banks and securities firms, through bidding, with an agreement to sell them back in the future.
(Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
A single purchase
