Chinese Central Bank to Inject $174 Billion into their Capital Markets Through Reverse Repo Operations on Monday, Reuters




Aren’t reverse repo operations when a central bank exchanges securities for cash? That would remove liquidity.

Maybe there’s a different name for it in China, who knows.. —-> Link
https://archive.is/yysqV

(New York Fed) “In a repo transaction, the Desk purchases Treasury, agency debt, or agency mortgage-backed securities (MBS) from a counterparty subject to an agreement to resell the securities at a later date. It is economically similar to a loan collateralized by securities having a value higher than the loan to protect the Desk against market and credit risk. Repo transactions temporarily increase the quantity of reserve balances in the banking system.

In a reverse repo transaction, the opposite occurs: the Desk sells securities to a counterparty subject to an agreement to repurchase the securities at a later date at a higher repurchase price. Reverse repo transactions temporarily reduce the quantity of reserve balances in the banking system”.

Leave a Reply

%d bloggers like this: