China continues to inject liquidity into market

Beijing: China's central bank, the People's Bank of China (PBOC), continued to pump money into the inter-bank market on Tuesday to provide more liquidity. The PBOC put 60 billion yuan (nearly $9 billion) into seven-day reverse repos, a process by which the central bank purchase securities from banks with an agreement to sell them back in the future. According to a PBOC statement, the reverse repo was priced to yield 2.25 per cent. The central bank effectively injected 30 billion yuan into China's monetary market as 30 billion yuan's worth of repos matured, Xinhua news agency reported. PBOC has adopted repos and other liquidity operations to ease money shortages in the market more frequently this year, rather than cuts in interest rates or the reserve requirement ratio. On Tuesday's interbank market, Shanghai Interbank Offered Rate (Shibor) rose 0.7 basis point to 2.003 per cent.