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PBOC skips open market operations

The People's Bank of China, China's central bank, suspended open market operations for the fourth working day on Wednesday, citing sufficient liquidity in the banking system. "The rising fiscal spending near year-end is sufficient to offset the influence from factors such as maturing reverse repos and to keep liquidity stable within the banking system," the PBOC said. On Wednesday, 40 billion yuan ($6.1 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 PBOC said earlier that it would conduct open market operations in a flexible way to meet the seasonal liquidity needs of banks near year-end.

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