| Follow us on:
|
![China is adding cash to the financial system to keep borrowing costs from climbing as banks hoard funds to meet quarter-end regulatory requirements [Xinhua]](http://thebricspost.com/wp-content/uploads/2013/08/yuan-forex.jpg)
China is adding cash to the financial system to keep borrowing costs from climbing as banks hoard funds to meet quarter-end regulatory requirements [Xinhua]
This has marked the fourth consecutive cash injection through the central bank’s regular reverse repurchase agreement (repo) on Tuesdays and Thursdays since June 25.
The yield for the latest seven-day reverse repo stood at 2.5 per cent, according to the central bank.
The latest cash injection will offset another 50 billion yuan of reverse repo agreements due on Tuesday, meaning net cash injection on Tuesday is zero. Meanwhile, another 35 billion yuan of reverse repo agreements are due to Thursday.
Since June, the central bank has resorted to reverse repo operations and medium-term lending facilities (MLF) to inject liquidity to the market. The PBOC extended a six-month MLF worth 250 billion yuan at an interest rate of 3.35 percent to 11 banks last Friday. It also lowered interest rates and the reserve requirement ratio on June 28.
China is adding cash to the financial system to keep borrowing costs from climbing as banks hoard funds to meet quarter-end regulatory requirements.
Source: Agencies
