(MENAFN- Qatar News Agency) China's central bank pumped another 120 billion yuan (nearly 19 billion U.S. dollars) into major commercial banks and brokerages via reverse repurchase agreement (repo) on Thursday.
It is the second reverse repo this week after the People's Bank of China (PBOC) unexpectedly put the same amount of liquidity into the market on Tuesday. The first marked the largest single-day cash injection since Jan. 2014, according to China's (Xinhua) News Agency.
The yield for the seven-day reverse repo still stood at 2.5 percent, according to a PBOC's statement.
Under a reverse repo, the central bank purchases securities from large banks and brokerages with the agreement to sell them in the future as an effective means to tackle short-term money shortage in the market.
Taking into account earlier reverse repos worth 90 billion yuan due on Tuesday and Thursday, the PBOC has made net money injections of 150 billion yuan this week, markedly up from 5 billion yuan a week ago.
In addition, another 110 billion yuan was put in place on Wednesday by the central bank through medium-term lending facility, also a tool designed for banks to borrow from the central bank by using securities as collateral.
Liquidity in the money market has tightened recently due to dropping new yuan funds outstanding for foreign exchange and a depreciating Chinese yuan.
The overnight Shanghai Interbank Offered Rate (Shibor), a key barometer for interbank lending in China, climbed to 1.83 percent on Thursday, up from around 1.4 percent at the end of July, despite the central bank's easing tools.
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