China's central bank skips open market operations
BEIJING - China's central bank suspended open market operations for the ninth consecutive working day Tuesday, citing sufficient liquidity in the banking system.
"Liquidity is sufficient to offset the influence from factors such as maturing reverse repos in the banking system," the People's Bank of China (PBOC) said on its website.
On Tuesday, 80 billion yuan ($12.68 billion) of reverse repos matured, meaning that market liquidity would drop by the same amount.
A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
The central bank has increasingly relied on open market operations for liquidity management, rather than cuts to interest rates or reserve requirement ratios.
China will maintain a prudent and neutral monetary policy in 2018 as the world's second-largest economy strives to balance growth with risk prevention.
