PBOC scales back cash injections before banks' liquidity checks

Shanghai

THE People's Bank of China scaled back the use of a short-term lending tool in its open-market operations, draining cash from the financial system as banks prepare to meet year-end liquidity checks by regulators.

The monetary authority auctioned 10 billion yuan (S$2.18 billion) of seven-day reverse-repurchase agreements at an interest rate of 2.25 per cent, less than the 30 billion offered a week ago. Banks' demand for funds typically rises in the run-up to deadlines for them to meet regulatory requirements.