China central bank skips open market operations
BEIJING - China's central bank suspended open market operations for the eighth consecutive working day Wednesday, citing sufficient liquidity in the banking system.
"Liquidity is sufficient to offset the influence from factors such as maturing reverse repos in the banking system," the People's Bank of China (PBOC) said on its website.
On Wednesday, 90 billion yuan (about $13.86 billion) of reverse repos matured, meaning that market liquidity would drop by the same amount.
A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
The PBOC said earlier that it would conduct open market operations in a flexible way to meet the seasonal liquidity needs of banks near year-end.
China has decided to maintain a prudent and neutral monetary policy in 2018 as the world's second-largest economy strives to balance growth and risk prevention.
"Prudent monetary policy should be kept neutral, the floodgates of monetary supply should be controlled, and credit and social financing should see reasonable growth," said a statement released after the Central Economic Work Conference, which concluded last week.
