China to conduct 1.1-trillion-yuan outright reverse repo operation

The People's Bank of China (PBOC) said Tuesday that it will conduct a 1.1-trillion-yuan (about 154.8 billion U.S. dollars) outright reverse repo operation on Oct. 9 to maintain ample liquidity in the banking system.

The operation will be carried out with fixed volumes through interest-rate bidding, with winning bids determined at multiple price levels. It will have a tenor of three months, or 91 days, according to the central bank.

As 800 billion yuan of three-month outright reverse repos are set to mature in October, the Oct. 9 operation will result in an increase of 300 billion yuan in outstanding three-month outright reverse repos for the month.

Wang Qing, chief macro analyst at Golden Credit Rating, said that the move continues to inject liquidity into the market, signaling a ramp-up in the use of quantity-based policy tools.

It will also help ensure the smooth issuance of government bonds and better meet the credit financing needs of enterprises and households, Wang said.

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, complementing previous measures such as temporary repos, temporary reverse repos, and the buying and selling of treasury bonds.