China's PBOC to skip open market operations: statement

[SHANGHAI] China's central bank said it would skip open market operations on Tuesday in order to keep liquidity stable in the country's banking system.

This would be the third straight trading day that the People's Bank of China (PBOC) has skipped daily reverse repurchase agreement operations. "The overall liquidity in the banking system is staying at a relatively high level," the PBOC said in a statement on its website.

In order to "keep liquidity basically stable in the banking system", the central bank decided to skip the reverse repurchase agreement operations on Feb 7, it added.

The PBOC has drained a net 270 billion yuan (US$39.36 billion) so far this week.

In early trade on Tuesday, the volume weighted average of the seven-day repo rate was at 2.35 per cent, down 9.54 basis points from the previous closing average rate.

The PBOC surprised financial markets on Friday by increasing the interest rates on open market operations by 10 basis points, on the first day back from the long Lunar New Year holidays.

REUTERS