Chinese Central Bank introduces overnight reverse Repo

The People's Bank of China has introduced a new 1-day reverse repurchase tool aimed at boosting liquidity and updating monetary policy. An initial injection of 300 billion yuan (approximately $44.1 billion) was made, with the interest rate set at 1.25%, about 15 basis points lower than the fixed 7-day repo rate of 1.4%. This move coincided with a decline in the average interest rates on interbank one-day loans, reflecting a technical approach to improving the effectiveness of monetary policy transmission in the market.

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