The central bank will conduct 1 trillion yuan in outright reverse repurchase operations on September 5

    The central bank continues to inject medium-to-long-term liquidity through outright reverse repurchase operations.

    On September 4, the People's Bank of China announced that to maintain ample liquidity in the banking system, it will conduct RMB 1 trillion in outright reverse repurchase operations on September 5, 2025. The operations will be conducted through fixed-amount, fixed-rate bidding with multiple price allocations, with a maturity of three months (91 days).

    A total of RMB 1.6 trillion in medium-to-long-term liquidity will mature in September, comprising RMB 1 trillion in 3-month buyout reverse repos, RMB 300 billion in 6-month buyout reverse repos, and RMB 300 billion in 1-year Medium-term Lending Facility (MLF) maturities.

    Following the reserve requirement ratio cut in May, the central bank has consistently conducted MLF and buyout reverse repo operations, maintaining a net injection of medium-term liquidity. Specifically, since switching to announcing reverse repo auction details one day prior to operations in June, the central bank conducted two, one, and two reverse repo operations in June, July, and August respectively, totaling 1.4 trillion yuan, 1.4 trillion yuan, and 1.2 trillion yuan in monthly reverse repo operations.

    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 open market operations, with transactions conducted once a month in principle and a term not exceeding one year.