China central bank makes biggest daily net OMO injection in over four months

© Reuters. A clerk of ICBC bank counts Chinese one hundred Yuan at its branch in Beijing

SHANGHAI (Reuters) – China’s central bank said it will inject 270 billion yuan ($39.09 billion) through seven-day reverse bond repurchase agreements on Wednesday, traders said.

On a net basis, the People’s Bank of China (PBOC) will inject 250 billion yuan into the market for the day, as 20 billion yuan worth of reverse repos are set to expire on Wednesday. The amount of daily net cash injection via reverse repo operations is the biggest since Jan.17, 2019.

The huge injection of fresh funds by the PBOC after rises in interbank money rates that partly reflected nervousness that the takeover of a troubled regional bank by regulator could herald a possible weakening of small banks’ ability to access interbank funding.

The PBOC has injected a net 400 billion yuan so far this week.

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