MADRID, 1 Sep. (EUROPA PRESS) –
The People’s Bank of China (PBOC, for its acronym in English) has carried out this Friday a reverse repurchase operation or ‘repo’ for which it has injected 101,000 million yuan (about 12,838 million euros) to banking entities, that they must return this money within a week. The interest applied to this liquidity line has been 1.80%.
As explained by the institution in a statement, this measure is intended to maintain reasonable and ample liquidity in the financial system.
The reverse repurchase consists of the purchase of securities by the Central Bank of China from its commercial financial institutions, with the agreement to resell them in the future.
Likewise, the People’s Bank of China has announced this Friday that it will cut by two points, from the current 6% to 4%, the rate of compulsory foreign currency reserves for financial institutions.
This measure, which will be applied as of September 15, aims, on the one hand, to improve the ability of Chinese financial institutions to use foreign currency funds and, on the other, to give stability to the yuan, whose exchange rates are at a minimum of 15 years.
