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China PBOC skips Open Market Operations today

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 31, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - For the first time in six months, the Chinese central bank, PBOC, refrained from offering reverse-repurchase agreements in open-market operations.

    Bloomberg explained that, “The decision to withhold the short-term lending tool comes after their use was scaled back in Tuesday’s auction window, when 10 billion yuan ($1.5 billion) of seven-day agreements were made available. That compares with a total of 70 billion yuan at the Dec. 22 and Dec. 24 auctions and resulted in a net 60 billion yuan being drained from the banking system this week. Lenders’ demand for funds typically rises in the run-up to year-end liquidity checks by regulators.”

    Meanwhile, China Central Bank drains a net 60 bln Yuan for the week via open market operations, versus a net 30 bln injection last week. While in the year 2015, the bank injects a net 10 bln Yuan via open market operations, versus a net 124 bln injection in 2014.
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