PBOC launches forward repo
Wednesday, 19 February 2014
BEIJING, Feb 18 (Xinhua): The People's Bank of China (PBOC) launched a 14-day forward repurchase operation (repo) at a bid rate of 3.8 per cent on Tuesday, which will siphon 48 billion yuan (US$7.9 billion) from the money market.
It marked the first time in eight months that the Chinese central bank has issued forward repurchase agreements. A repo is a central bank operation to withdraw funds in the interbank market to prevent excessive liquidity.
Since June of 2013, the PBOC has conducted reverse repos in its regular open market operations to boost liquidity.
Economist Lu Zhengwei of the Industrial Bank said the PBOC's move fell within market expectations.