China’s central bank adds liquidity via reverse repos

China’s central bank on Tuesday conducted 3 billion yuan (about 447.85 million US dollars) of reverse repos to maintain liquidity in the banking system, Xinhua reports.

The interest rate for the seven-day reverse repos was set at 2.1 percent, according to the People’s Bank of China.

The move aims to keep stable liquidity in the banking system, the central bank said.

A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

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