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PBOC Net Return RMB48B Ytd; Expert: RRR Cut Likely This Qtr
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The People's Bank of China (PBOC) conducted yesterday (1st) a seven-day reverse repurchase operation of RMB2 billion through interest rate bidding to maintain a reasonable and sufficient level of liquidity in the banking system. The operating interest rate remained unchanged at 1.8%. As RMB50 billion of reverse repo matured that day, a net RMB48 billion was returned in a single day. According to Securities Daily, Mingming, chief economist at CITIC Securities, opined that the PBOC may adopt measures such as lowering the reserve requirement ratio (RRR) to provide sufficient liquidity to the market, under a supportive monetary policy stance. In view of the current level of excess reserves and the potential pressure to issue government bonds, it is possible that the RRR cut will be implemented in July or August. It is not ruled out though that the PBOC will provide liquidity through open market operations or relending. AAStocks Financial News |
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