The People's Bank of China announces a post holiday buyout reverse repurchase of RMB 1.1 trillion

The People's Bank of China announced on Tuesday (September 30) the launch of a buyout style reverse repurchase operation, indicating that it will continue to stabilize market expectations and maintain a reasonable and sufficient funding situation through medium and long-term liquidity injection.

The People's Bank of China announced on Tuesday that on October 9th, after the end of the long holiday, it will carry out a 1.1 trillion yuan (RMB, 199.215 billion Singapore dollars) buyout reverse repurchase operation through fixed quantity, interest rate bidding, and multi price bidding, with a period of three months (91 days).

The central bank has conducted multiple buyout style reverse repurchase operations this month. Buyout reverse repurchase refers to the direct purchase of bonds held by financial institutions by the central bank, which is equivalent to releasing liquidity to the market. Unlike common reverse repos, buyout reverse repos do not recover funds at maturity, but rather remain in the market for a long time.

On September 4th, the People's Bank of China announced that in order to maintain sufficient liquidity in the banking system, a 1 trillion yuan buyout reverse repurchase operation will be carried out on September 5th through a fixed quantity, interest rate bidding, and multi price bidding method, with a term of three months (91 days).

On September 15th, the People's Bank of China launched a 600 billion yuan buyout style reverse repurchase operation through a fixed quantity, interest rate bidding, and multiple price bidding method, with a term of six months (182 days).

According to the Economic Reference Daily, the People's Bank of China created a buyout style reverse repurchase tool last year, which covers periods of three months, six months, etc., enhancing the central bank's ability to adjust liquidity across time periods within one year. The industry believes that the central bank's continued increase in buyout style reverse repurchase can ensure the smooth issuance of government bonds, support fiscal policy, and meet the capital turnover needs of banks, better supporting economic development.