The PBOC reduced open-market reverse repo injections to zero at the start of June while maintaining a policy stance to keep market liquidity ample. This echoes Aug. 7, 2024, when a 7-day reverse repo was also set at zero amid weak bank demand. Short-term rates eased at month-start—DR001 and DR007 fell—and the 1-year AAA bank negotiable certificate of deposit yield fell to 1.4275% on June 1 and stayed low on June 2; subdued NCD yields likely contributed to the zero reverse-repo decision. Orient J

The PBOC reduced open-market reverse repo injections to zero at the start of June while maintaining a policy stance to keep market liquidity ample. This echoes Aug. 7, 2024, when a 7-day reverse repo was also set at zero amid weak bank demand. Short-term rates eased at month-start—DR001 and DR007 fell—and the 1-year AAA bank negotiable certificate of deposit yield fell to 1.4275% on June 1 and stayed low on June 2; subdued NCD yields likely contributed to the zero reverse-repo decision. Orient Jincheng chief macro analyst Wang Qing cited limited short-term government bond issuance, moderate credit growth and lower bank demand for PBOC funding as drivers, and said buyout reverse-repo volumes across the two tenors may continue to be trimmed. He expects the PBOC to flexibly use open-market operations, guided by DR001, DR007 and NCD yields, to keep market rates aligned with the policy rate.