The People’s Bank of China has released RMB220 billion into the banking system via reverse repo.
Including this sum, the central bank this week alone has injected the net amount of RMB133 billion into the banking system in an effort to spur the lending necessary to prod economic growth in an anemic economy.
The government noted there are some RMB33 billion in central bank bills and repo maturing this week compared to RMB120 billion in reverse repo that will also mature this week. Without the latest reverse repo, PBOC would have had to withdraw RMB87 billion from the banking system.
Despite the huge funding growth, liquidity has not reached the 50 bps cut in reserve requirement ratio. This means PBOC could probably make available RMB400 billion for further open market operations.
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