China's open market: Reverse repos increased to 448 billion, with a net injection for eight consecutive days today amounting to 91 billion

China's Open Market: Reverse Repo Increases to 448 Billion, Net Injection Today at 91 Billion for Eight Consecutive Days

Reuters Shanghai, May 27 - The People's Bank of China announced on Tuesday that it conducted a seven-day reverse repo operation of 448 billion yuan at a fixed rate and quantity tender, with the rate remaining at 1.40%. The bidding amount continued to match the winning amount. This operation amount increased compared to the previous day, marking the eighth consecutive day of net injection in the open market; however, due to a large amount of maturing funds, the net injection scale today decreased to 91 billion yuan.

According to Reuters statistics, a total of 946 billion yuan in reverse repos will mature in the open market this week, with 357 billion yuan maturing today, the largest single-day amount for the week.

Last week, the central bank net injected 460 billion yuan in the open market; at the same time, deposit rates were linked to the Loan Prime Rate (LPR) and were lowered, while the Medium-term Lending Facility (MLF) was significantly oversubscribed, with policies to stabilize growth and soothe expectations being implemented without pause. Tax period liquidity showed slight restraint but remained stable, and it is expected that policies to safeguard the economy will continue to be unwavering.

Analysts believe that although the China-U.S. trade war has temporarily entered a ceasefire mode, challenges facing the domestic economy have not been eliminated. The effects of the monetary policy adjustments in May, including reserve requirement ratio cuts and interest rate reductions, are still to be released. Macro policies to support economic growth cannot be relaxed, and there remains room for further LPR reductions under the continued monetary easing rhythm in the second half of the year.

Details of the central bank's fund injection and withdrawal this week (unit: 100 million yuan)