China central bank to increase open market operations during Lunar New Year

[BEIJING] China's central bank said on Thursday it will increase the frequency of open market operations between Jan 29 and Feb 19 to maintain liquidity in the market during the Lunar New Year.

The People's Bank of China (PBOC) said it would allow more banks to participate in the short-term liquidity operation (SLO) effective Jan 29. Bonds issued by government supported agencies as well as commercial banks can be used as collateral for borrowing in SLOs and open market operations.

The PBOC launched SLOs in 2013 to supplement its other monetary policy tools. The facility is mainly used to provide one- to three-day direct lines of credit to commercial banks, though loans with other maturities are occasionally used.

REUTERS