PBOC liquidity injection today, 7- and 14-day reverse repos
The People's Bank of China injected funds into money markets today, increasing liquidity, using both 7-day and 14-day reverse repos
- Mike sounded the warning bell during the Chinese afternoon yesterday: PBOC gauges demand from financial institutions for 14-day repos
- And, at the yuan fix today we got the news the bank had indeed injected funds using the 14-day instruments: In Open Market operations, the PBOC inject 90bn yuan through 7-day reverse repos AND 50bn with 14-day reverse repos
- 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.
- "The offering of long-term funds seems to be sending a signal to warn market participants not to get excessively leveraged," said Liu Changjiang, a bond analyst at Soochow Securities Co. in Shanghai. "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."
Indeed, again today the PBOC gauged demand for another round of 14-day reverse repos (along with 7-day) for more tomorrow. Stay tuned ...
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.