The central bank will conduct 500 billion yuan in outright reverse repurchase operations on August 15

    The central bank will once again inject medium-to-long-term funds through outright reverse repurchase operations.

    On August 14, the People's Bank of China announced that to maintain ample liquidity in the banking system, it will conduct 500 billion yuan in outright reverse repurchase operations on August 15, 2025. The operations will be conducted through fixed quantity, interest rate bidding, and multiple price bidding, with a term of 6 months (182 days).

    This will mark the central bank's second buyout reverse repo operation in August.

    On August 8, to maintain ample liquidity in the banking system, the central bank conducted 700 billion yuan in buyout reverse repos through fixed quantity, interest rate bidding, and multiple price-level awards, with a maturity of three months (91 days).

    Through these two buyout reverse repurchase operations, the central bank injected a total of 1.2 trillion yuan in medium-to-long-term funds, resulting in a net injection of 300 billion yuan. A total of 900 billion yuan in buyout reverse repurchase agreements matured in August.

    Following the reserve requirement ratio cut in May, the central bank has continuously conducted medium-term lending facility (MLF) and buyout reverse repo operations, maintaining a net injection of medium-term liquidity. Notably, since switching to announcing buyout reverse repo tender details one day prior to operations in June, the central bank conducted two and one buyout reverse repo operations in June and July respectively, totaling 1.4 trillion yuan in monthly buyout reverse repo operations each month.

    To maintain reasonable and ample liquidity in the banking system and further enrich the central bank's monetary policy toolkit, the People's Bank of China launched the open market outright reverse repurchase operation tool in October 2024. The operation targets primary dealers in the open market, with transactions conducted once a month in principle and a term not exceeding one year.