People’s Bank of China Dumps Money Into Markets

Overnight People’s Bank of China (PBOC) pumped another 130 billion yuan or 19.58 billion in U.S. dollar terms into the seven day reverse repo market. 

ChinaThe reverse repo market is the process in which the PBOC agrees to purchase securities from China (FXI, quote) banks with the understanding the PBOC will sell those securities back to the bank in the future.  In this case seven days from today.

The 130 billion yuan purchase is somewhat deceiving as PBOC did a similar move last week in the amount of 60 billion yuan and today will be selling back those securities to the banks. Once the dust settles effectively the PBOC will have added 70 billion in seven day reverse repo market.

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