PBOC increased liquidity today, using both 7-day and 14-day reverse repos
|On Wednesday, the People's Bank of China (PBOC) injected funds into money markets today, increasing liquidity, using both 7-day and 14-day reverse repos
At the yuan fix today, the Chinese central bank injected funds using the 14-day instruments.
In Open Market operations (OMOs), the PBOC inject 90bn yuan through 7-day reverse repos and 50bn with 14-day reverse repos
Headlines via Bloomberg:
PBOC using 14-day reverse-repurchase agreements for the first time since February
Amid speculation policy makers are looking to increase the use of more expensive, longer-term funding to cool a bond rally.
Liu Changjiang, a bond analyst at Soochow Securities Co. in Shanghai, noted, “"The offering of long-term funds seems to be sending a signal to warn market participants not to get excessively leveraged. The follow-up impact hinges on what the PBOC plans to do next - whether it will continue to offer 14-day reverse repos and any other policies - so the market can gauge its determination."
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