Beijing, Sep 22: China’s central bank pumped 50 billion yuan ($7.85 billion) into the money market via reverse re-purchase agreement (repo) on Tuesday, the first cash injection this week. The yield for the seven-day reverse repo stood at 2.35 percent, Xinhua news agency quoted the Bank of China’s (PBOC) statement as saying.(Read: French antique dealers return artefacts to China)
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 shortages in the market. The cash injection will offset the effects from earlier reverse repo due on Tuesday. Given a stable renminbi (RMB), the money shortage was greatly eased in September and the PBOC’s operations were smaller than those in August.