ZCZC
BCN-14
CHINA-MONEY-MARKET
510 bln yuan of reverse repo contracts to mature next week
BEIJING, Dec. 30 (BSS/Xinhua) — A total of 510 billion yuan (about 78
billion U.S. dollars) of reverse repo contracts are set to mature in China’s
money market in the coming week.
China’s central bank has skipped open market operations for the past week,
citing sufficient liquidity in the banking system as rising fiscal spending
near year-end is sufficient to offset impacts of maturing reverse repos.
A reverse repo is a process by which the central bank purchases securities
from commercial banks through bidding, with an agreement to sell them back in
the future.
Rather than across-the-board rate cuts and reserve requirement ratio
adjustments, China has relied more on open market operations to inject or
withdraw liquidity at different rates and for different time periods.
China will continue a prudent and neutral monetary policy in 2018 as the
world’s second-largest economy strives to balance growth with 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 earlier this month after the
Central Economic Work Conference.
BSS/XINHUA/SR/1745 HRS