Central bank suspends open market operations on fiscal spending increase
Xinhua,December 25, 2017 Adjust font size:
BEIJING, Dec. 25 (Xinhua) -- China's central bank suspended open market operations on Monday due to a fiscal spending increase near the year end.
The rising fiscal spending near end of the year is sufficient to offset the influence from factors such as maturing reverse repos and to keep liquidity stable within the banking system, the People's Bank of China (PBOC) said on its website.
On Monday, 120 billion yuan (about 18.24 billion U.S. dollars) of reverse repos matured, meaning that market liquidity would drop by the same amount.
The PBOC said earlier that it would conduct open market operations in a flexible way to meet the seasonal liquidity needs of banks near the year end.
China has decided to maintain a prudent and neutral monetary policy in 2018 as the world's second-largest economy strives to balance growth and risk prevention.
"Prudent monetary policy should be kept neutral, the floodgates of monetary supply should be controlled, and credit and social financing should see reasonable growth," said a statement released after the Central Economic Work Conference, which concluded last week. Enditem