China's central bank to conduct 1-trillion-yuan outright reverse repo operation

The People's Bank of China (PBOC), the country's central bank, on Thursday said that it will conduct a 1-trillion-yuan (about 140.74 billion U.S. dollars) outright reverse repo operation on Friday, aiming to maintain ample liquidity in the national banking system.

The operation will have a tenor of three months (91 days) and will be conducted using a fixed-quantity, interest-rate-bidding and multiple-price-bidding method, according to the PBOC statement.

Wang Qing, chief macro analyst at Golden Credit Rating, said that the operation will help inject liquidity into the market, underscoring a continued supportive monetary policy stance and stabilizing market expectations.

Outright reverse repo operations -- a tool the central bank introduced in October 2024 to manage liquidity in the national banking system -- are carried out once each month with a tenor of no more than one year.

These operations have enriched the country's monetary policy toolkit following its earlier introductions of temporary repos, temporary reverse repos, and the buying and selling of treasury bonds. ■