Quarter-beginning tax payments and a rise in government bond net redemptions are
set to tighten liquidity this week. July tax receipts historically run about
RMB1.7–1.9 trillion (2021–25); government bond net repayments have risen to
RMB568.7 billion, producing a combined funding shortfall exceeding RMB2.2
trillion. The PBOC is likely to step up reverse-repo injections to cushion money
markets; a RMB900 billion six‑month buyout reverse repo matures this week,
leaving scope for net injection. Overnight reverse repos may be reintroduced to
smooth short-term volatility—the tool was used at quarter-end on June 29–30
(RMB300 billion and RMB600 billion) to blunt rate spikes.
