At a State Council press briefing PBOC spokesperson and deputy governor Zou Lan
said the central bank’s 1H tool injections effectively offset a c.1 tln yuan
liquidity shortfall from reserve requirement payments and cash issuance; the
money-market overnight rate DR001 averaged 1.31% in the first six months and
overall conditions were stable. To better meet banks’ short-term liquidity needs
and improve the precision and effectiveness of policy-rate control, the PBOC in
late June added an overnight reverse-repo instrument to open-market operations
and narrowed the operating-rate band for temporary repos/reverse repos from
70bps to 50bps. The central bank also launched an offshore central-bank repo
tool to facilitate RMB liquidity management and RMB bond allocation by overseas
central-bank-type institutions and has completed its first operation.
