PBOC adds CNY30 billion via seven-day reverse repos to rescue Chinese stocks


To calm nerves and stabilize the domestic equity market, the People’s Bank of China (PBOC) made massive liquidity injections into the financial system to stem the collapse in the Chinese stocks amid regulatory risks, per Bloomberg.

Key takeaways

“The PBOC pumped in 30 billion yuan ($4.6 billion) of liquidity into the financial system with seven-day reverse repurchase agreements, resulting in a net injection of 20 billion yuan on Thursday. “

“The operation marked the authorities’ first short-term cash addition of more than 10 billion yuan since June 30.”

“The yield on the most actively traded contract of 10-year government bonds fell the first time in three days after rising by the most in a year on Tuesday.”

Market reaction

Amidst conciliatory articles from the state-run media and the central bank’s supportive measures, the Chinese stocks opened in the green for the first time this week.

The Chinese benchmark, the Shanghai Composite Index is higher by 1%, currently trading at 3,396. China A50 index rises 0.65% to trade at 15,353. Hong Kong’s Hang Seng rallies 2.40% to 26,168, as of writing.

Meanwhile, the rest of Asia is also higher, cheering the rebound in Chinese stocks. Japan’s Nikkei 225 adds 0.65% while Australia’s ASX 200 advances 0.41%.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.

EUR/USD News

GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 

GBP/USD News

XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more

Forex MAJORS

Cryptocurrencies

Signatures