China's Bold Move to Stabilize Liquidity: A New Method for Reverse Repo Operations
China's central bank has announced a shift in its 14-day reverse repo operations by implementing a fixed quantity with interest-rate bidding, allowing for multiple price-level winning bids. This strategy seeks to ensure ample liquidity in the banking system, accommodating the diverse funding requirements of various institutions.
- Country:
- China
On Friday, China's central bank unveiled plans to modify its approach to 14-day reverse repo operations. By introducing a system of fixed quantity highlighted by interest-rate bidding and multiple price-level winning bids, the People's Bank of China aims for enhanced liquidity regulation.
This strategic initiative is designed to maintain sufficient liquidity within the banking system, a crucial element for financial stability.
The central bank asserts that this method will cater to the unique funding needs of different participating institutions, promoting a more tailored financial environment.
(With inputs from agencies.)
Advertisement
Google News