China's central bank continued to inject liquidity into the money market through reverse repos Thursday with rates unchanged despite a U.S. interest rate hike overnight.
The People's Bank of China (PBOC) conducted 120 billion yuan (17.4 billion U.S. dollars) of seven-day reverse repos at an interest rate of 2.55 percent and 30 billion yuan of 14-day reverse repos at 2.7 percent, unchanged from previous operations.
The U.S. Federal Reserve on Wednesday raised short-term interest rates by a quarter of a percentage point, but signaled a slower pace of rate hikes next year as the U.S. economy is expected to cool down.
The PBOC said in a statement that Thursday's operations are aimed at offsetting the impact of factors such as government bond issuance and maintaining reasonable and sufficient liquidity in the banking system.
The injection followed 60 billion yuan of reverse repos conducted Wednesday. The PBOC has pumped funds into the market for four consecutive days so far this week, after a suspension of reverse repos that lasted for a record 36 straight trading days.
Through reverse repos, the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
