China's central bank to conduct 600-bln-yuan outright reverse repo operation

The People's Bank of China (PBOC), the country's central bank, announced on Friday that it will conduct a 600-billion-yuan (about 85 billion U.S. dollars) outright reverse repo operation next Monday to maintain ample liquidity in the banking system.

The operation will be carried out with a fixed quantity through interest-rate bidding, with winning bids determined at multiple price levels. It will have a tenor of six months, or 182 days.

This move represents a net injection of liquidity, as 400 billion yuan of similar six-month outright reverse repos are set to mature in December.

This marks the seventh consecutive month that the PBOC has expanded its outright reverse repo operations.

Wang Qing, chief macro analyst at Golden Credit Rating, stated that these sustained liquidity injections demonstrate the continuity of supportive monetary policy, which will facilitate government bond issuance and alleviate potential liquidity strain from the year-end maturity of interbank certificates of deposit.

Outright reverse repo operations -- a tool the central bank introduced in October 2024 to manage liquidity in the national banking system -- are carried out 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.